Energy: Future Marine Energy

Baroness Miller of Chilthorne Domer: asked Her Majesty's Government:
	What is their response to the report from the Carbon Trust, Future Marine Energy.

Lord Sainsbury of Turville: My Lords, the Carbon Trust's Future Marine Energy report provides a useful vision of the potential for marine renewables. The Government also recognise this potential and, since 1999, have committed more than £75 million to support the development of these technologies. That includes £42 million under the DTI's wave and tidal stream energy demonstration scheme, which will support a number of multi-device, grid-connected pre-commercial demonstrations. The demonstration scheme will allow industry to show that the vision can become a reality.

Baroness Miller of Chilthorne Domer: My Lords, I thank the Minister for his reply. He is right to say that the vision needs to become a reality. However, does he accept some of the conclusions in the report about economies of scale and the importance of the commercial orders now coming in? What are the Government doing to encourage the UK to place orders such as the one that Portugal placed last week for a wave power generator that was developed in Scotland? Can the Minister reassure me that we will not develop all these technologies only to lose to the rest of the world the ability to generate energy from them?

Lord Sainsbury of Turville: My Lords, an element of economy of scale is involved, but we need to be careful when we are talking about technologies such as tidal lagoons, which is a reasonably mature technology. As for orders, it is correct that the Portuguese Government have a long association with wave energy. They have an interesting thing—a feed-in tariff, which is 23 euro cents or about 15p per kilowatt hour. That is how the Portuguese Government are supporting that technology. It is interesting: using the Portuguese tariff will mean that it will take approximately twice as long to break even as a similar project under the DTI's marine renewables deployment fund. Our scheme is a good way of achieving the same end.

Baroness Miller of Hendon: My Lords, does the Minister agree with another of the recommendations in the Carbon Trust's report that,
	"Developing a clear long-term policy framework of support",
	would be most important for tidal and wave technologies, as it would provide "greater investment certainty"? Does he further agree that that would be important for all forms of energy generation? Is the energy review likely to provide some information on that?

Lord Sainsbury of Turville: My Lords, I agree. We have such a scheme in place; that is what the renewable obligation is about. It is important that we have stability on that scheme.

Lord Redesdale: My Lords, how seriously are the Government taking marine energy? In their own consultation document, Our Energy Challenge: Securing clean, affordable energy for the long-term, I could not find one mention of marine-generated electricity. If that is the case, that is an indication that the Government are not even contemplating seriously the inclusion of marine-generated electricity in the future.

Lord Sainsbury of Turville: My Lords, as I said, since 1999 we have committed more than £75 million to support the technologies. For a technology at this stage of development and with the current costs, that seems to be a suitable investment.

Baroness Platt of Writtle: My Lords, we had a presentation in the House about a lagoon off Swansea that did not interfere with navigation. Is that going ahead?

Lord Sainsbury of Turville: My Lords, there is a proposal by a company called Tidal Electric Limited for a Swansea Bay tidal lagoon, which was put forward as part of a demonstration of new technologies. It was turned down because it is in fact a very traditional and mature technology, and there is nothing very innovative about it. The company is now trying to get private finance for it.

Lord Campbell of Alloway: My Lords, is it the Civil Aviation Authority that gives these directions? I have a reason for asking that is not wholly related to this Question.

Lord Sainsbury of Turville: My Lords, the noble Lord's question relates to the next Question.

Lord Ezra: My Lords, can the noble Lord explain why if tidal lagoon technology is a mature technology it should nevertheless not be supported by the Government as being a renewable technology? After all, wind power is a mature technology, and it is strongly supported by the Government.

Lord Sainsbury of Turville: My Lords, the point that I was making was that there are two different things here. We have a demonstration project that we give money for, when new technology is demonstrated. If the company built the tidal lagoon and it was producing electricity, that would be supported under the renewables obligation in the same way as wind is.

Viscount Tenby: My Lords, is any research being carried out into whether the Severn tidal bore could be harnessed in any way? If not, why not?

Lord Sainsbury of Turville: My Lords, the Severn barrage project has been looked at a number of times. It is an enormously expensive scheme and, as of this moment, the economics of it do not look very desirable.

Lord Anderson of Swansea: My Lords, the objection in the past given to the Swansea lagoon project was that of cost. Now the Minister says that it is an outdated technology. Have the Government changed their position?

Lord Sainsbury of Turville: My Lords, I did not say that it was an outdated technology. It is a perfectly good, mature technology, which is well understood, and there is no need for it to be supported by funds for developing new technologies. That is the point that I was making. If the figures are as the proposers of the scheme suggest—we will produce a report that will look at the costs—they should be able to get private finance for it. In combination with the renewables obligation, that should make it a perfectly good project financially.

Lord Dixon-Smith: My Lords, the Severn barrage costings, as I understand it, were largely undertaken when the price of oil was still down at $20 a barrel. What impact has the rise in oil prices had on the relative cost of energy from that project?

Lord Sainsbury of Turville: My Lords, obviously, every time that oil or gas prices go up, that will help the economics of it. I have not seen any calculation done recently, in the light of current figures, but no doubt those who are keen on the scheme will soon produce new figures to show that it really after all is a good expenditure of £14 billion.

Aviation: Diversion of Stricken Aircraft

Lord Rotherwick: asked Her Majesty's Government:
	Whether the provisions for directing stricken aircraft to diversion airports are satisfactory.

Lord Davies of Oldham: My Lords, the commander of an aircraft is responsible for the safety of that aircraft. Consequently, responsibility for determining what represents a suitable diversion airport rests with the commander. Each emergency incident is unique. It is not feasible to issue prescriptive guidance to air traffic controllers on handling emergency situations. Civil Aviation Authority guidance is regularly reviewed; the next modification will be promulgated on 28 April following the diversion of an aircraft—call-sign Evergreen 1435—into Heathrow.

Lord Rotherwick: My Lords, I thank the Minister for his Answer. However, is he aware that in the past five years 39 aircraft such as airliners have declared emergencies—technical not medical emergencies—and have either landed at Heathrow or been diverted to Heathrow or Gatwick? Is it right that stricken aircraft that are probably in immediate danger should let down over densely populated areas such as the centre of London? In particular, the aircraft to which the Minister referred, the Evergreen, let down over the centre of London, having diverted to Heathrow. That aircraft had one engine shut off and three spooling down. Such aircraft in imminent danger should surely go to diversionary airfields. What diversionary airfields will be made available for the safety of the centre of London and other such urban centres?

Lord Davies of Oldham: My Lords, the Evergreen commander demanded that the aircraft should put down at Heathrow, and he is the final arbiter of the airport designated because he alone can judge how serious the emergency is in his aircraft. The CAA is advising air traffic controllers that, where they can, they should communicate to commanders that the airfields to which they should go are those that involve the least risk, but the final decision is with the aircraft commander.

Baroness Trumpington: My Lords, is the Minister aware that I speak as a past chairman of the Air Transport Users Council? As such, I commend what he said. Stricken aircraft, to use my noble friend's words, must go to the nearest airfield where they can land safely for themselves, their passengers and anyone on the ground. Is the number of near misses still published every year? That is well worth having a look at.

Lord Davies of Oldham: My Lords, the number of near misses is identified in publications so that the accuracy can be presented in those terms. There are often rather melodramatic stories about how close aircraft get to each other that, when investigated, prove not to be a real emergency. This was a real emergency; the commander was above Heathrow and said that he intended the aircraft to set down at that airport. The air traffic controllers are obliged to comply.

Lord Clinton-Davis: My Lords, as the president of the British Airline Pilots Association (BALPA), I can say that the Minister's Answer has the entire approval of the union. The decision should always be left to the pilot. Any other solution is not worthy of contemplation.

Lord Davies of Oldham: My Lords, pilots are on flight plans where they might not know the available options, and air traffic controllers have been advised that, where they are in a position to communicate a choice of airfields that could be used in an emergency, the aircraft should be diverted to the one that will cause the fewest potential problems on the ground. But the ultimate position is for the commander of the aircraft to take.

Lord Campbell of Alloway: My Lords, I apologise for asking the right question at entirely the wrong time.

Lord Davies of Oldham: My Lords, I was grateful for the forewarning of the question and feel utterly capable of answering it.

Lord Dixon-Smith: My Lords, I understand that the aircraft concerned in the accident that gave rise to the Question was coming in over the Thames estuary and heading for central London. From its location, it clearly could have landed in Manston, which is in east Kent. So far as the Minister is aware, was any attempt made to advise the aircraft captain of that possibility?

Lord Davies of Oldham: My Lords, the aircraft was at 36,000 feet, and therefore had a range of options. But the pilot could see an airfield down below and said, "I can see through clear cloud that the visibility at that airport is excellent". When it was communicated to him that it was London Heathrow, he still decided to take that option.

Lord Rotherwick: My Lords, is the Minister aware that the air traffic controller guidance states that it is desirable that aircraft should not be routed over densely populated areas in emergencies? Is he aware also that the Air Accidents Investigation Branch asks whether sufficient guidance is provided on the avoidance of built-up areas when vectoring aircraft in an emergency?

Lord Davies of Oldham: My Lords, the Civil Aviation Authority and the whole aviation industry have learnt lessons from Evergreen 1435. The fresh advice emphasises that, where air traffic controllers can influence the commander of the aircraft, he should certainly, where it is possible, be diverted to the airport of least risk. On that occasion, the aircraft commander was insistent. The air traffic controllers complied and brought him down safely.

Nigeria

Lord Roberts of Llandudno: asked Her Majesty's Government:
	Whether they propose to cancel all of the debt incurred by Nigeria.

Lord McKenzie of Luton: My Lords, the 20 October 2005 Paris Club agreement with Nigeria represents the largest debt relief package ever in sub-Saharan Africa. Creditors will cancel 60 per cent of Nigeria's £17 billion debt. The UK alone will cancel £2.8 billion. Nigeria will use part of its oil windfall to pay the remaining debt. It would be illegal for ECGD to go beyond the Paris Club agreement and cancel debt for development reasons.

Lord Roberts of Llandudno: My Lords, I thank the Minister for that Answer. We have a one-off golden opportunity to cancel the repayment of Nigeria's debt and to bring hope to many millions of people. With the Nigerian elections due next March, do the Government envisage, once those elections are seen to be free and fair, the money being made available then? In a Guardian article of 11 January, the Chancellor of the Exchequer said that there must be,
	"full debt relief for not 38 but all the world's poorest countries".
	Do Her Majesty's Government agree with that statement?

Lord McKenzie of Luton: My Lords, there has been a misunderstanding about the technicalities. The ECGD is not able to write off the balance of the debt under its constitution under the Export and Investment Guarantees Act 1991. Furthermore, there has been no windfall to the UK Government. In technical terms, this is a balance sheet item. If the UK Government were to grant further relief, they would either increase public expenditure or have to shift resources from existing programmes, particularly of DfID. That would be inappropriate, given Nigeria's relative position.

Baroness Rawlings: My Lords, despite the Paris Club agreement that the Minister mentioned, can Her Majesty's Government justify debt relief as being the most effective way of helping Nigeria, which is probably potentially one of the richest countries in Africa, but sadly is unstable, riddled with corruption, with criminal networks stealing an estimated 300,000 barrels of oil daily, and with unrest between violent Islamist and domestic rebels growing? Have Her Majesty's Government had any discussions with China, whose Foreign Minister recently said of its new involvement with the Nigerian regime, "We try to separate politics from business"?

Lord McKenzie of Luton: My Lords, the Paris Club agreement arose from an initiative by the Government of Nigeria, given the windfall that they have received from oil revenues. The Paris Club creditors took the overall view that it was a reasonable deal for them and a good deal for Nigeria, coupled, as it should be, with making sure that the savings that Nigeria makes—something like £1 billion a year—are recycled to make sure that more youngsters enter education and that more teachers are available locally. Nigeria is a very poor country, and it has about a quarter of the population of Africa. It is entirely right that we participated. At the Government's request, we led the way in creating the agreement.

Lord Foulkes of Cumnock: My Lords, may I encourage my noble friend to ignore the negative comments coming from the other side of the House? Will he confirm that it is because of the initiative of the Chancellor of the Exchequer and the Secretary of State for International Development that all the debt cancellation deals right around the world are taking place? Will he also confirm that because of the debt deal in Nigeria, $1 million at least is being freed up and that that is going to poverty reduction? My estimate is that about three and a half million people—young children—will go to school in Nigeria as a result of that. That is something that we should be proud of.

Lord McKenzie of Luton: My Lords, yes, I agree with my noble friend. He is right. I think that some three and a half million children will be given the chance of an education as a result of this. The UK Government have led the way through the Gleneagles summit agreement to cancel up to $55 billion of debts owed to the IMF, the World Bank and the African Development Bank. Along the way, DfID itself has committed £1.1 billion in bilateral assistance to Africa for 2005–06 and twice that amount of aid through multilateral institutions. It is also working hard to make a success of the Doha round. That is quite apart from the work that is being done on the IFF for Immunisation programme and the IFF arrangement itself. The Government should justifiably be proud of their record in this area.

The Lord Bishop of Chelmsford: My Lords, will the Minister confirm that a considerable amount of the debt that we are talking about was taken on by the oppressive Abacha regime in Nigeria and that the present democratic regime is working extremely hard to reverse a deeply flawed political system of governance and economic life in that country? Have the British Government discovered the location of the moneys that the Abacha regime squirreled out of Nigeria and into British banks and whether they have returned them to Nigeria?

Lord McKenzie of Luton: My Lords, specifically on the latter point, the answer is, "No, but we are working hard on it". The right reverend Prelate is right about the initiative that has been taken by the current Government of Nigeria. I think that they were described by the IMF as having one of the best finance teams in Africa. They have worked on a home-grown reform programme with countrywide consultations on content called the national economic empowerment and development strategy. Things are changing. The original debt was created under trading arrangements, and the ECGD, the creditor, was involved obviously because it had to meet guarantees to people undertaking trade with Nigeria.

Lord Avebury: My Lords, bearing in mind that despite the efforts of the Economic and Financial Crimes Commission, corruption is still widespread and pervasive in Nigeria, what steps is the Paris Club taking to promote measures in Nigeria that would generate even greater sums for the benefit of education and health? Regarding the money that was squirreled away in the British banks, is any investigation being made of the $176 million in bribes paid through an English solicitor in respect of a liquefied natural gas plant in Bonny?

Lord McKenzie of Luton: My Lords, I have no information on the latter point, but if the noble Lord would care to write to us, I am sure that it will be followed up in so far as we are not currently dealing with it in practice.
	Corruption is of course a challenge throughout much of Africa and Nigeria, but the president has declared himself an enemy of corruption and publicly supports anti-corruption initiatives such as the Economic and Financial Crimes Commission. DfID is working with Nigeria and other governments to improve transparency in a host of areas.

Local Government: Industrial Action

Baroness Scott of Needham Market: asked Her Majesty's Government:
	What discussions they will hold with the Local Government Association with regard to the threatened industrial action by local government workers.

Baroness Andrews: My Lords, the proposed industrial action being planned for 28 March is a matter for the trade unions and employers involved with the local government pension scheme. The Government's prime role has been and continues to be to encourage the trade unions and the employers, through the Local Government Association, to reach a negotiated settlement within the framework provided by the tripartite committee.

Baroness Scott of Needham Market: My Lords, can the noble Baroness tell the House why the changes to the local government pension scheme were applied to existing as well as new members, whereas in other parts of the public sector such as teachers, firefighters, NHS workers and the police, only new entrants were affected? Does she agree that the absence of a clear and consistent approach by central government to the problems of funding public sector pensions makes life difficult for the employers who are trying to negotiate settlements?

Baroness Andrews: My Lords, the important thing that I should get across to the noble Baroness is how the local government pension scheme differs from the other pay-as-you-go schemes in the public sector that affect teachers, nurses and civil servants. Those people have a normal retirement age of 60 and can stay in work beyond that, while the local government pension scheme has had a normal retirement age of 65 since the 1920s; it is almost Victorian in origin. However, it has had a facility to retire early represented by what we call the 85-year rule. We believe that that is age discrimination, which causes the problem.
	The other difference is that the LGPS is a funded pension scheme with a different financing arrangement. Because other public sector schemes are pay-as-you-go, they can manage short-, medium- and long-term costs in a different way, so the protections must be different. I assure the noble Baroness that we are clear about what we want to see in pensions—good public sector pensions for everyone, no matter where they work.

Lord Marsh: My Lords, I should declare an interest having once been involved with a public sector company. Does the Minister not agree that the less that politicians get involved with industrial relations, the better it is for those who have to manage the company?

Baroness Andrews: My Lords, I completely agree with the noble Lord. The role of the tripartite committee is precisely to stand apart while facilitating discussion. The ODPM and Government are not the employers. We want to see a reformed scheme that will bring better benefits while removing the age discriminatory element that also discriminates against women. The noble Lord is absolutely right: it is up to the trade unions and the employers to negotiate.

Baroness Lockwood: My Lords, would my noble friend not agree that the 85-year rule is not only discriminatory on grounds of age but also against women, given their broken employment pattern? Is that an issue that the Government might raise in their discussions with the LGA?

Baroness Andrews: Yes, my Lords, that point is important. The fact is that it is an old pension scheme. Its roots are in a time when the majority of local government employees were men. Indeed, until the 1970s, when the scheme was last reviewed, 75 per cent were men. The workforce is different now; women are the majority, and a majority are part time.
	The slightly complicated 85-year rule essentially means that people can work the same number of years, but if their ages differ some will retire on a fully funded pension—if they have achieved 85 years—while others with exactly the same length of service will achieve a less well funded pension. Because women cannot build up those commitments in the workplace, they are almost bound to be disadvantaged by that. Indeed, 25 per cent of people in the local government pension scheme do not benefit at all from the 85-year rule.

Baroness Hanham: My Lords, would the Minister agree that this scheme is meant to be fully funded but at present it is funded only to the tune of 73 per cent? Would she also agree that there is a shortfall of £32 billion in the scheme, which represents more than £1,400 per household in the country? Does she have any knowledge of how the scheme is expected to come back into full balance?

Baroness Andrews: My Lords, I believe that the noble Baroness is correct and, if I am wrong, I will write to her in detail. She will know that we have made it clear twice that the costs of revocation would not fall either to the council tax payer or the central taxpayer; neither would the costs of a reformed scheme be borne by taxpayers, because we could not agree to changes that added to a rise in the cost of council tax.

Lord Greaves: My Lords, I should remind the House that I am a local district councillor. Is the Minister aware that many of us have considerable sympathy with the employees and are in a difficult position, as local employers, in coping with the situation? Are the Government aware that the unions are talking of a second round of strikes, possibly on 3 and 4 May, coinciding with the local elections? What advice do the Government plan to give to local authorities and returning officers if that happens?

Baroness Andrews: My Lords, of course a strike ballot is a matter for the trade unions. Likewise, any strikes in the public service, especially those that affect vulnerable people, are of concern to us all. We very much hope that the trade unions will consider and reconsider, because, through the tripartite committee, we are working hard to bring the parties together to reach an understanding on how to move forward to a better pension scheme that does away with an age-discriminatory element, as we are required to do under our obligations to Europe. We hope that we can continue those discussions.
	We are sorry that the trade unions have pre-empted the decision; but we will go on talking, and we will certainly bear in mind the need to give local authorities advice and support. Any contingency planning is a matter for them in the first instance.

Consolidated Fund (Appropriation) (No. 2) Bill

Brought from the Commons; endorsed with the certificate of the Deputy Speaker that the Bill is a money Bill, and read a first time.

Parliament (Participation of Members of the House of Commons) Bill [HL]

Lord Baker of Dorking: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.

Moved accordingly, and on Question, Motion agreed to.

Consumer Credit Bill

Read a third time.
	Clause 29 [Issue of standard licences]:

Lord Sainsbury of Turville: moved Amendment No. 1:
	Page 24, line 6, at end insert—
	"(2B) For the purposes of subsection (2A)(e), the business practices which the OFT may consider to be deceitful or oppressive or otherwise unfair or improper include practices in the carrying on of a consumer credit business that appear to the OFT to involve irresponsible lending.""

Lord Sainsbury of Turville: My Lords, last week I tabled an amendment to Clause 29. At the same time I wrote to those noble Lords who had participated in our debates on this issue, explaining why I had done this.
	In Grand Committee and on Report noble Lords expressed their concerns about irresponsible lending practices. I have considered their contributions on this issue carefully and have some sympathy for the positions they have expressed and thought hard about how we could respond. I believe that the wording of Clause 29 would allow the OFT to take account of irresponsible lending practices. We now feel, in the light of noble Lords' contributions, that there is merit in making the ability of the OFT to do this explicit on the face of the legislation.
	I turn to the form of the amendment: rather than introducing a duty on lenders, the most appropriate means of addressing irresponsible lending practices is in the context of the OFT's powers to monitor and enforce the fitness of licence holders. With this amendment, the OFT, which is best placed to monitor changing practices in a dynamic market, will be able to provide guidance to licence holders on lending practices which, on the basis of the OFT's knowledge and experience of the market, are likely to be regarded by it as irresponsible.
	The OFT would do that through its fitness guidance. That approach will allow the OFT to provide business with an indication of what types of things are considered to be irresponsible lending practices. Businesses would therefore have some guidance on the type of conduct that they should avoid, while not being discouraged from seeking out new ways of addressing customer demand. This would be backed by the sanction available to the OFT of reviewing a lender's fitness to hold a licence if the lender engages in such practices.
	In taking this route, the Government have been mindful of existing OFT regulatory practice. For example, the OFT has published guidance on certain kinds of irresponsible lending practices that it is likely to regard as unfair or improper, most notably in its non-status lending guidelines, which are available from the OFT website.
	The noble Baroness, Lady Miller, has expressed some concern to me about the ambit of the term "lending" and that it might not embrace some forms of lending such as hire purchase. I reassure your Lordships' House, as I have already reassured her, that "lending" in this context should have its natural, ordinary meaning, in that it connotes the existence of a lender-borrower relationship, and we consider that that natural meaning would include the granting of credit in all its forms.
	In tabling this amendment I recognise the contribution of noble Lords on both sides of the House in seeking a clear recognition in the Bill of the importance of discouraging irresponsible lending practices. The amendment does that in a way that accommodates the desire of those noble Lords on the opposition Benches to make clear the OFT's power to provide business with some greater indication of irresponsible lending practices that should be avoided.
	The amendment does not—as has been suggested in the press—increase the powers of the OFT. It simply makes it clear that the OFT, in exercising its powers, may have regard to irresponsible lending practices in determining fitness to hold a licence under the Act. The Government have listened to noble Lords' concerns and amended the Bill. I beg to move.

Baroness Miller of Hendon: My Lords, at Second Reading I commented on a deficiency in the Bill, which did not impose any responsibility at all on creditors to ensure that the debtor had the ability to meet the obligation that he was taking on. In Committee I introduced an amendment which provided for the creditor to make inquiries which were not onerous in nature. We could not vote on it in Committee and, because of the circumstances of your Lordships' House on Report, I was not able to test the opinion of the House then.
	I had brought my amendment back, intending to move it and expecting to vote on it today, but in the interval the Minister has offered a compromise in the form of his amendment. I am extremely grateful that he is offering something, although this compromise is slightly more onerous than my much more modest one would have been. However, on the basis that we are at Third Reading and want to get something, I intend to accept his amendment from our side.
	This whole matter deals with what the amendment calls irresponsible lending. I do not wish to be churlish, but I wrote to the Minister because, in my view, the amendment did not deal with irresponsible granting of credit—one of the problems where we had so many terrible horror stories of people getting all these credit cards and really getting themselves into trouble. Nevertheless, the Minister wrote to me and has said in the House today that he thinks it does. He quoted from all the different dictionaries about the meaning of the word and I accept what he says. We just hope that this is not a problem that will come back to haunt us when yet another tragic case appears.
	I hope that what the Minister has said the situation is, it will turn out to be. I also hope that the OFT will, by its power of regulation of the credit licences, be able to protect the vulnerable and—yes, indeed—the sometimes foolish and profligate people. I do not intend to oppose this amendment.

Lord Razzall: My Lords, from these Benches, we too welcome this amendment. At Second Reading and the various stages of this Bill, we have had a number of debates on the inter-relationship between a right or an obligation to lend responsibly, the powers of the OFT and what should be in the Bill. The Government have come forward with a compromise between the various views that have been expressed and I welcome the fact that they have been prepared to do that.
	Concern remains in two areas. First, there is undoubtedly concern among the providers of credit that the lack of definition on the face of the Bill as to what constitutes responsible lending will enable the OFT to define its own powers and then enforce them without consultation. That is one reason why a number of us have argued that there should be more definition in the Bill because, once it leaves your Lordships' House, we are completely in the hands of the OFT in relation to the definitions of its powers and irresponsible lending. When the Minister replies, I would welcome a comment on whether he has any information on the consultation processes that the OFT will go through in guiding the industry towards avoiding unnecessary mistakes by providers of credit.
	That leads to the second area, which touches on the industry's concerns that the timetable published by the Minister's department contains a number of areas of secondary legislation, guidance and consultation. Will the Government bear in mind that instituting the necessary systems—particularly IT systems—to reflect the change in the law will often take, say, 18 months from regulatory certainty to full implementation? In their timetable for this, will the Government, first, press the OFT to take that into account, and, secondly, take it into account themselves?
	Having said that, we obviously welcome the amendment as progress. It has been a pleasurable Bill in which to participate, as the Minister and the noble Baroness, Lady Miller of Hendon, will undoubtedly agree. It is always a pleasure to do business with the noble Baroness, particularly when the Minister can compromise with her.

Lord Borrie: My Lords, one of the principal tasks of the Office of Fair Trading under the Consumer Credit Act is determining whether someone is fit to hold a consumer credit licence. Evidence that an applicant has engaged in deceitful, oppressive, unfair or improper business practices is one factor that may indicate unfitness to hold such a licence, as set out in Clause 29. The amendment would spell out clearly that irresponsible lending is included in that criterion of unfitness.
	I welcome the amendment because irresponsible lending is a very serious mischief engaged in by some in the consumer credit industry. Lending to those who are already overcommitted with debt is irresponsible. I trust that this new provision will incentivise lenders and potential lenders to take a good deal of care in checking out the borrower's means to repay and the extent to which repayment may be inhibited by the obligations that the borrower has to other lenders. I very much welcome the amendment.

Lord Sainsbury of Turville: My Lords, I thank my noble friend Lord Borrie for his comments. We gave a great deal of thought to his intervention on this matter during the debate because he has so much experience in this area.
	Clause 42 covers the question of consultation on guidance. There is a specific requirement for the OFT to consult whomever it thinks necessary, and its record of doing so is very good. When we come to Amendment No. 3, we will debate whether it should be left to the OFT to do that or whether we want to see some political interference in the process. We think that the OFT is a very good body for doing that. We will, as always, urge the OFT to look far ahead in a thorough way with regard to systems and implementation.

On Question, amendment agreed to.

Lord De Mauley: moved Amendment No. 2:
	After Clause 37, insert the following new clause—
	"OFT'S GENERAL DUTIES
	After section 1 of the 1974 Act insert—
	"OFT's general duties
	(1) In discharging its functions under this Act to regulate the conduct of licences, the OFT must, so far as is reasonably possible, act in a way—
	(a) which is compatible with the regulatory objectives; and
	(b) which the OFT considers most appropriate for the purpose of meeting those objectives.
	(2) The regulatory objectives are—
	(a) the protection of consumers;
	(b) the promotion of an efficient and innovative consumer credit industry; and
	(c) maintaining a competitive market in consumer credit.""

Lord De Mauley: My Lords, I apologise for labouring the point on this amendment, but as your Lordships will remember, we withdrew it on Report, reserving our right to bring it back. Our purpose in retabling it is that we felt it should be made clear on the face of the Bill that the OFT's regulatory objectives should include a balance between consumer protection, the promotion of an efficient and innovative consumer credit industry and the maintenance of a competitive market. At this stage, I reiterate my declaration of an interest as set out in the Register of Lords' Interests.
	Since Report stage I have written to the Minister and I have received a very helpful response on this and on the subsequent amendment. I understand that those letters are available in the Library. I hope he will agree with me that it will be useful to have the debate on the record and that he will forgive me if I go over the points. I should also explain that, as a result of that correspondence, we have removed what were subsection (2)(d) and subsection (3) from the amendment that was tabled on Report. They dealt with avoiding unnecessary and disproportionate burdens on business. We dropped them on the ground that Clauses 19 and 20 of the Legislative and Regulatory Reform Bill would give statutory effect to the commitment of the OFT, currently contained in the voluntary Cabinet Office enforcement concordat, to act proportionately and to minimise the costs of compliance for business by ensuring that any action it requires is proportionate to the risks.
	However, as an overall point on the amendment, as your Lordships are aware, we on these Benches remain concerned at the extent of the powers of the OFT and this amendment seeks to achieve a balanced approach. In his letter in response to mine, the Minister sought to emphasise a difference between the FSA and the OFT by contrasting the FSA's extensive rule-making powers with the way in which consumer credit is handled. Yet the practical effect of the Bill is to vest huge powers in the hands of the OFT. All the detailed guidance that the OFT will produce will, in reality, be rules for want of another name. It is true that guidance is, formally, no more than that and that it is for the courts to decide matters of law. But local enforcement authorities will treat such guidance as definitive; many, particularly small, businesses will regard it as authoritative; and only the brave, the foolhardy and the rich will challenge it in the courts.
	Similarly, the OFT's new licensing powers are extensive and we feel need to be the subject of effective parliamentary scrutiny. We see a conflict between arguing, on the one hand, that a key element of the Bill involves giving the regulator more power to regulate the market, yet, on the other, saying that the powers are not so great as to warrant proper democratic accountability. We feel we need a framework, some parameters within which those rules or guidance are to be set. So the specific objectives contained in the amendment are consumer protection, the promotion of an efficient and innovative consumer credit industry and the maintenance of a competitive market.
	On consumer protection, the Minister said in his letter to me that,
	"the whole purpose of the Consumer Credit Act (and the Bill when finalised) in relation to the OFT is to protect consumers".
	He went on to say:
	"I am not sure what else you think the OFT should be doing, or would do if there were a specific objective about consumer protection".
	I hope noble Lords will forgive my naivety, but just because something is obvious does not appear to prevent the Government stating it. For example, it did not prevent the Government tabling the amendment that we have just dealt with on Clause 29, despite—as the Minister said in a separate letter on that subject to several noble Lords, including my noble friend Lady Miller of Hendon—the fact that he thought the previous wording already allowed the OFT to take account of irresponsible lending practices where it thinks it relevant.
	In relation to the maintenance of a competitive market and the promotion of an efficient and innovative consumer credit industry, the Minister said in his letter to me that the OFT's published goal is,
	"to make markets work well for consumers. Markets work well when there is vigorous competition between fair-dealing businesses. When markets work well, good businesses flourish".
	While we may agree with that, nevertheless it sounds like a mission statement. I hope your Lordships will forgive me when I voice scepticism of mission statements which often seem to be pure marketing speak. Since that mission statement—if that is what it is—is written by the OFT, presumably it can be rewritten at any time to suit the OFT's purposes. So it is a long way short of a requirement placed on it by legislation.
	This Bill, when enacted, ought to be, so far as reasonably possible, future proof, so the intentions of Parliament should be set out on its face. In his letter the Minister said that,
	"we would not wish to create a situation where the OFT might grant a licence to a less 'fit' person because it might be desirable to have more of a certain type of business in the market".
	That is a reasonable point, but it ought to be the regulator's job to take difficult decisions. Our point is that we need to require the OFT to take a balanced approach and that there needs to be a benchmark against which to demonstrate that that has been achieved. The amendment would make the OFT more accountable and enable Parliament to assess its performance. I beg to move.

Lord Razzall: My Lords, I support the noble Lord, Lord De Mauley. A thread runs through what those of us who are generally in support of the Bill have been trying to say. It runs through our comments on a number of Bills that emanate from the Department of Trade and Industry. We believe that we must, wherever possible, retain the right to parliamentary scrutiny of the proposals, the regulations and the actions of non-elected bodies. The Minister earlier gave the game away, because he said that surely it was better for the OFT to be making decisions on the matter rather than the Government.
	I entirely agree with him: no one on these Benches or indeed the Conservative Benches is suggesting that it would be better for the Government to make decisions. We are suggesting that we need proper parliamentary scrutiny and that legislation that emanates from the Department of Trade and Industry should be in such a form that there can be proper democratic scrutiny of regulations in both Houses of Parliament. That is the point we are trying to achieve and there is a consistency and a thread through the amendments that we and the Conservative Opposition have proposed to try to achieve that. I agree that if there was a choice between the Government and the OFT deciding, we would choose the OFT. If there was a choice between the OFT and Parliament deciding, we would choose Parliament.

Lord Borrie: My Lords, on the face of it this seems an unobjectionable, harmless, even useful amendment, but when we look at the three regulatory objectives as described in the amendment, the first one, the protection of consumers, is to my mind a statement of the obvious. The OFT has been operating the Consumer Credit Act for more than 30 years. No one has suggested that it has had some different kind of objective from the one set forth there—the protection of the consumer. Let me take the third regulatory objective set out: maintaining a competitive market in consumer credit. That sits well enough with the Office of Fair Trading's various and in recent years increasing powers to promote competition and handle monopolies, restrictive practices and anti-competitive practices of all kinds. It hardly needs a specific reference in this legislation in view of that.
	The second regulatory objective that the amendment desires to set out is the promotion of an efficient and innovative consumer credit industry. I am not sure how anybody can pursue that unless it is backed up by some kind of detailed provision in the legislation, which it is not. I am not sure that alongside the protection of consumers, which the noble Lord has admitted is the real primary objective, it is feasible to start thinking that the Office of Fair Trading has all the time to be concerned with whether we have any efficient industry and trying to promote innovative kinds of consumer credit giving. I do not see that as part of the objectives of the OFT and I therefore ask noble Lords to oppose the amendment.

Lord Freeman: My Lords, I cannot agree with the noble Lord, Lord Borrie. I strongly support the amendment moved in a reasonable fashion by my noble friend Lord De Mauley, but this House should not be mislead by the reasonableness of his argument to think that the amendment is not going to be pressed. I believe that it should be, and I shall explain why. The noble Lord, Lord Borrie, argued that Amendment No. 2 is, in part, a statement of the obvious. Therefore, he can surely have no objection to it. In relation to subsection (2)(b) of the new clause, the argument of the noble Lord, Lord Borrie, and, perhaps, of the Minister is that there is no clear definition. The Minister argued that the word "irresponsible" would be covered by guidance and guidance could cover subsection (2)(b).
	This House should look at whether, on balance, this amendment is helpful. It is helpful in a deregulatory sense for three reasons. First, it is clear—clearer than the references in the two earlier pieces of legislation put together. Indeed, it is not an exact replication of earlier legislation. Secondly, it is balanced. Here I agree with the noble Lord, Lord Borrie, because the amendment balances the need to protect the consumer. My noble friend Lady Miller of Hendon has said throughout the proceedings on the Bill that we on these Benches support clear, sensible, practical protection for the consumer. But one must also remember the suppliers; that is, the industry. It is important that legislation strikes a balance. Finally, the language of the amendment emphasises the importance of light regulation. I hope that the House will accept the amendment.
	The noble Lord, Lord Razzall, spoke about the guidance. I am unpersuaded that the argument advanced on Report was erroneous. It was that Parliament is not seeking to interfere with the decisions of the OFT. All that Parliament is asking is that the Minister should approve the issuance of the guidance and therefore be answerable. That is a clear, sensible, parliamentary procedure and principle, and I hope that this House will accept it.

Lord McKenzie of Luton: My Lords, I thank noble Lords who have participated in this debate. I know that concerns have been expressed about the way in which the OFT might discharge its duties under the legislation and that the noble Lord, Lord de Mauley, has had an exchange of correspondence with my noble friend Lord Sainsbury. That correspondence has been placed in the Library of the House. I am aware that this exchange will be reiterating stated positions, but it is important that we get them on the record. I am sorry that our response is likely to disappoint the noble Lord.
	I will address the arguments set out in the letter from my noble friend Lord Sainsbury and emphasise, for the benefit of noble Lords, why this amendment is unnecessary. The concept that the noble Lord has placed at the centre of the amendment, that of general duties for the OFT, seems to be drawn from Section 2 of the Financial Services and Markets Act 2000, which sets out the regulatory objectives of the Financial Services Authority. That suggests—it was indicated in the way the amendment was moved—that the noble Lord considers that the two bodies share a common regulatory outlook and approach in addition to having similar functions. They do not.
	Parliament, through the Financial Services and Markets Act 2000 and the Enterprise Act 2002, has deliberately and clearly made the OFT and FSA very different organisations in terms of structural organisation, function and regulatory approach. The FSA has extensive rule-making powers, which are not subject to parliamentary oversight. The only requirement is that FSA must immediately provide the Treasury with a copy of the rules once made.
	That approach is very different from the way in which consumer credit is handled under the Consumer Credit Act 1974 and in this Bill. Detailed rules relating to consumer credit are made by secondary legislation, which, as the noble Lord knows, is subject to parliamentary scrutiny. All that the OFT can do is provide guidance about the manner in which it will administer its functions under the Act. In that sense, OFT guidance defines the ability of the OFT to act in certain circumstances. Where we believe that the OFT's powers could impose burdens on business, such as in setting fees and penalties, the OFT is required to gain the approval of both DTI and Treasury Ministers, who are answerable to Parliament for their decisions, before publication, which again is not necessary in the case of the FSA. The OFT's functions under the Consumer Credit Act 1974, both as it is now and as extended by the Bill, generally relate to the licensing of businesses as being fit to engage in a licensable activity under the Act.
	There are, however, various other pieces of legislation—the main ones are the Enterprise Act 2002, the Competition Act 1998 and the Consumer Credit Act 1974—through which the OFT enforces both consumer and competition legislation as well as undertaking various market initiatives. The OFT's task is to pull all its roles, which are set out in that legislation, into a coherent whole, and its published goal is,
	"to make markets work well for consumers. Markets work well when there is vigorous competition . . . When markets work well, good businesses flourish".
	The FSA's regulatory objectives go well beyond licensing and embrace the conduct of regulated businesses in accordance with certain principles defined by the FSA after proper consultation. Moreover, Parliament has determined that this broader role should be qualified by reference to certain general objectives in the Financial Services and Markets Act 2000. I therefore do not believe that the FSA's regulatory objectives, with specific reference to consumer credit, provide a precedent for the OFT's activities under this Act, and I hope that this summary of the difference between the two helps to support my resistance to the amendment.
	I shall now discuss the individual elements of the noble Lord's amendment, the first of which is consumer protection. The whole purpose of the Consumer Credit Act 1974 and this Bill is to ensure that the OFT protects consumers. The preamble to the 1974 Act states this, and it is the purpose behind the bulk of the provisions of the Act and the Bill. The licensing system is ultimately there to protect consumers by ensuring that a licensee is fit, both before a licence is granted and throughout the lifetime of the licence. Other new powers in the Bill are also designed as consumer protection measures; my noble friend Lord Borrie made that point with some force. I listened carefully to the noble Lord, but it is still not clear to me what else he thinks the OFT should be doing or would do differently, or what else it should be expected to do if a specific objective on consumer protection were added to the Bill. We have not heard anything about that.
	The second element of the noble Lord's amendment relates to the maintenance of a competitive market and the promotion of an efficient and innovative consumer credit industry. As I have already said, the OFT's specific role in consumer credit is primarily limited to licensing, which is a consumer protection measure. We do not believe that the fitness test is broad enough to accommodate considerations of the level of competition in the market or in a market sector, or the promotion of an efficient and innovative industry. Nor do we believe that it would be appropriate in this context. Indeed, we believe that it could even be positively harmful in some circumstances. For instance, we would not want to create a situation—one might call it a balance—where the OFT might grant a licence to a less fit person because it might be desirable to have more of a certain type of business in the market. Nor would we want competition issues to be a factor in applying requirements because the Consumer Credit Act 1974 is not the appropriate way in which to deal with such issues.
	As I have already mentioned, the OFT already has powers under the Enterprise Act 2002 and the Competition Act 1998 to deal with anti-competitive behaviour across all sectors. It does not need additional requirements linked specifically to its functions under the Consumer Credit Act 1974. In fact, it is clear that the OFT already considers competition issues in the consumer credit market as part of its wider role. In fairly recent times, the OFT has referred both the store card and the home credit markets to the Competition Commission, as well as considering the sale of payment protection insurance. I still believe that what is already set out in the Bill is a more than sufficient safeguard, given that the OFT is also subject to the usual range of accountability measures—a point which the noble Lord, Lord Razzall, stressed—such as NAO scrutiny and appearances before House Committees.
	OFT decisions can also be subject to judicial review. In previous debates, the noble Lord has suggested that this should be used only as a last resort, and I agree. However, the fact remains that the sanction is there and could be used if necessary.
	To conclude, the amendment is unnecessary and could cause problems because the duties for which it provides are of a general nature. If noble Lords believe such duties are necessary, they may feel that they should be contained in the Enterprise Act, which deals with the OFT as a whole. It is not appropriate, in our view, that such general duties should be included in legislation that deals with only one part of the OFT's responsibilities. The point on competition is particularly inappropriate because the OFT's duties under the Consumer Credit Act are primarily to do with licensing, and it should not apply competition criteria to individual licensing decisions. This does not, of course, prevent the OFT applying its powers under the Enterprise Act and Competition Act to the consumer credit market generally.
	I hope this explanation will allow the noble Lord to withdraw the amendment.

Lord De Mauley: My Lords, I thank the noble Lord, Lord Razzall, and my noble friend Lord Freeman for their comments, and the noble Lord, Lord Borrie, and the Minister for theirs. However, I am afraid we are still apart. There is a simple difference of opinion which can be distilled down to the fact that we believe the OFT's powers are extended by the Bill and that there needs to be a balanced framework within which those powers are exercised, and the Government disagree. In those circumstances, I think it is appropriate to test the opinion of the House.

On Question, Whether the said amendment (No. 2) shall be agreed to?
	Their Lordships divided: Contents, 132; Not-Contents, 150.

Resolved in the negative, and amendment disagreed to accordingly.

Lord De Mauley: moved Amendment No. 3:
	After Clause 42, insert the following new clause—
	"OFT GUIDANCE
	After section 183 of the 1974 Act insert—
	"OFT guidance
	No guidance is to be published under the 1974 Act without the approval of the Secretary of State.""

Lord De Mauley: My Lords, this amendment would require that no guidance was to be published under the 1974 Act without the approval of the Secretary of State. In his letter to me, which is available in the Library, the Minister said that the OFT and the DTI work closely and that the OFT already consults the DTI on all such matters, as a matter of course, even where it is not a legislative requirement. That is very helpful, and if he can confirm that for the record, I shall be happy to withdraw the amendment. I beg to move.

Lord Razzall: My Lords, I should like to make the point that a number of us have been making at every stage of the Bill. The amendment is not in my name, but I well understand the intention of the noble Lord, Lord De Mauley; it reflects the point that we have made consistently about wanting proper parliamentary scrutiny. It is a very simple point. The Government do not agree with it. I do not think this will be pushed to a vote, but I should like my view to go on the record.

Lord Borrie: My Lords, I was going to make a lengthy speech proclaiming the need for the independence of the OFT, without political interference. It is obviously unnecessary for me to say all that now, and I am delighted with what the noble Lord, Lord De Mauley, has said.

Lord Sainsbury of Turville: My Lords, I, too, have a lengthy speaking note. If the noble Lord, Lord De Mauley, is happy for me simply to confirm what I have said in my letter, which will spare the House having to listen to a lengthy argument, I am very happy to do so. My letter set out quite clearly why requiring the Secretary of State to have this extra responsibility would add nothing to the Bill.

Lord De Mauley: My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Sainsbury of Turville: My Lords, I beg to move that this Bill do now pass.
	Moved, That the Bill do now pass.—(Lord Sainsbury of Turville.)
	On Question, Bill passed, and returned to the Commons with amendments.

Childcare Bill

Lord Adonis: My Lords, I beg to move that this Bill be now read a second time. This is an important Bill for the welfare of children in our country, which I believe will be welcomed in all parts of the House. It is the first legislation dedicated exclusively to childcare and the early years—bringing services for young children and their families into the mainstream of the modern welfare state. It flows from the Government's commitment to improving the life chances of all children and their families; to tackling poverty and disadvantage at their cause; and thereby to the promotion of social mobility.
	Early education and childcare have the unique potential to help meet all three of these goals—improving the welfare of children, tackling poverty and accelerating social mobility. Significant progress has already been made. Since 1997, we have made free nursery places universally available for three and four year-olds. Virtually all four year-olds and 96 per cent of three year-olds now take up these free nursery places. We have established 700 Sure Start children's centres, providing integrated childcare, early learning, health and social services in deprived communities. We have also enabled a huge expansion of childcare to take place—600,000 extra places since 1997—and we have transformed support for parents of younger children, through the childcare element of the working tax credit benefiting 337,000 families, and through both a substantial increase in paid maternity leave from 18 to 26 weeks and the first-ever paid paternity leave for fathers.
	Look at this picture as a whole and we are witnessing the creation of a new and large sector of the welfare state, as important for the future of Britain and the welfare of its people as the education and national health services we have come to take for granted. Seventeen billion pounds has been spent on under-fives since 1997 and there is much more to come. The Bill creates the essential framework for government to complete the creation of the national under-fives services, and by government I mean central government and local government working together in partnership with the private and voluntary sectors.
	I hardly need explain to your Lordships why this new framework is so important. Without high-quality childcare and early childhood services, children from low-income families will lose out twice. First, they are more likely to live in poverty if their parents are not working and earning. Secondly, they will not be benefiting from the pre-school experience which better-off children gain as a matter of course—meeting other children, broadening their horizons and helping their cognitive development.
	The research is clear that the early years of a child's life are its most formative. The Institute for Fiscal Studies reported in December last year, from a study of a cohort of children from 1958, that starting education before the compulsory school starting age of five can yield benefits in cognitive tests such as reading and maths at age seven, and this effect remains significant up to the age of 16. The IFS concluded:
	"Controlling for a particularly rich set of child, parental, family and neighbourhood characteristics, we find some positive and long-lasting effects from early education".
	The Effective Provision of Pre-school Education project, reporting in 2004, similarly concluded that for those children who attend pre-school for two years, cognitive development at the age of five is four to six months more advanced than for those who have not attended at all. For those who start at the age of two, cognitive development at the age of five can be as much as 10 months more advanced. The EPPE project concluded:
	"Pre-school experience, compared to none, enhances",
	all-round development in children, and that:
	"Disadvantaged children . . . benefit significantly from good quality pre-school experiences, especially",
	where they are with,
	"a mixture of children from different social backgrounds".
	The inspection evidence is also positive. In March 2005, 99 per cent of registered settings had received either a "satisfactory" or a "good" rating from Ofsted. Since then, Ofsted has added an additional category of "outstanding" to distinguish and recognise those providers performing especially well. Ofsted reported further last August on good practice in childcare and nursery education and gave a strongly encouraging picture of the breadth of excellent provision across the country.
	We now need to take that progress further, which is what the Bill does. In Part 1, the Bill empowers local authorities to be strategic leaders for under-fives and childcare provision in their localities—commissioning, facilitating and planning provision; and championing the rights and needs of parents and children. Equally important, in Clauses 49 and 50 in Part 3 and Chapter 2 in Part 3, is the new and enhanced regime for regulation and inspection which will, we intend, give the same quality and focus to the early years that we have brought to schools over the past decade through Ofsted.
	In fulfilling their new duties, we expect local authorities to develop early childhood services in partnership with their NHS colleagues in primary care trusts and Jobcentre Plus. Much good work is already under way in these areas. Sure Start local programmes and now children's centres are providing crucial services that integrate for the first time the support that children under five and their families may need. We have invested heavily in this area and will continue to do so to ensure that by 2010 there is a children's centre for every community, and 3,500 nationwide. I have written to noble Lords to elaborate on the arrangements for the rollout of those 3,500 centres, setting out important contexts for this Bill.
	The Bill provides not only a framework for under-five services, but key objectives for these services. Clause 1 requires local authorities to improve the outcomes of all children in their area and to reduce the division between those with the poorest outcomes and the rest. The Government believe, and propose in this Bill, that we should use this unique opportunity of developing under-five services to reduce the inequalities that persist between those from the poorest backgrounds and the mainstream of society. The Bill sets out an expectation that local authorities will encourage all children to reach their full potential and, in particular, concentrate on progressing more rapidly those most disadvantaged. In the words of Clause 1:
	"An English local authority must . . . improve the well-being of young children in their area, and . . . reduce inequalities between young children in their area in relation to . . . physical and mental health and emotional well-being . . . protection from harm and neglect . . . education, training and recreation . . . the contribution made by them to society",
	and,
	"social and economic well-being".
	Clause 1 encapsulates the philosophy of Sure Start, which we wish to extend. The Government welcome the early findings from the national evaluation of Sure Start last year, including the issues that it highlighted, which gave us the opportunity to reflect on what works and to modify our policies and practice in line with the emerging evidence. We have since issued guidance for children's centres, which addresses many of the issues raised in the report, including the need to improve outreach to the most disadvantaged families.
	The provision of sufficient childcare is a key feature of the Bill. If parents are to be able to balance work and family life, they need to have access to affordable and flexible childcare. Clause 6 requires local authorities to secure sufficient childcare for working parents in partnership with private, voluntary and independent sector providers. For most parents, most of the time, childcare requirements are met by informal arrangements—not least by grandparents and other relatives—together with existing patterns of nurseries and child minders.
	This Bill will support parents by enhancing the range of choices available to them, requiring local authorities to plan for childcare to take account of a proper local analysis of what parents use and need in their localities. However, we recognise that there are two groups that may require extra assistance, so we have included two specific references in the Bill in respect of those on low incomes and of disabled children. Clause 6 specifically requires local authorities to,
	"have regard to the needs of parents in their area for . . . the provision of childcare in respect of which the child care element of working tax credit is payable, and . . . the provision of childcare which is suitable for disabled . . . children".
	Let me say a word more about disabled children, who are, rightly, of great concern to the House. Disabled children and young people currently face multiple barriers that make it more difficult for them to achieve the same outcomes as their peers. Twenty-nine per cent of families with disabled children live in poverty, mainly because their parents are unable to access childcare that meets their often complex and highly demanding needs. By putting the needs of disabled children in the Bill, we are making it clear that local authorities must work with providers, parents and disabled children themselves to develop provision that better meets their needs, and thereby help to reduce poverty in these families.
	To reflect the fact that some disabled young people develop at a different pace to their peers, the Bill extends the duty on local authorities to secure sufficient childcare for disabled children from the age of 14 to the age of 16. Those extra two years reflect the fact that there may be a need for childcare for longer to provide parents with the support they need, and to give disabled children the opportunity to continue to access provision after the school day.
	I know some of your Lordships wish us to go further still and extend that duty beyond the age of 16. We will debate this issue fully, and, as I have already indicated to the noble Lord, Lord Rix, the Minister for Children and I will be very glad to discuss it with him and any other noble Lords who wish to join us. But there are two issues I should point out at the outset—not only the cost implications, but the fact that the Bill is concerned with childcare. Provision suitable or essential for young adults with additional needs, including disabled young adults, is a priority that is being addressed by other support systems, including the disability living allowance, the independent living fund, direct payments and the new individual budget pilots that build on Mencap's In Control projects, all of which allow families to purchase the support that best meets their needs. The Government are fully committed to improving the life chances of disabled children, and I will be glad to set out fully the range of initiatives under way when we discuss this issue specifically.
	I want to refer particularly to young looked-after children, who are, rightly, another prime concern of your Lordships. We have come a long way in raising the profile of looked-after children since the launch of Quality Protects in 1998. The Children Act 2004 placed a new duty on local authorities to promote the educational achievements of looked-after children. That duty applies to all such children regardless of their age. Children's centres, and the new duty to improve outcomes in this Bill, will make a further significant contribution. Under Clause 3, local authorities will have to ensure that they are proactive in providing for those from the most disadvantaged and vulnerable backgrounds, who will include looked-after children and their carers. Local authorities must also ensure that the information and advice that they provide to parents is accessible to such carers.
	Part 2 empowers and requires local authorities in Wales to secure sufficient childcare and provide information to parents. These provisions broadly follow the English provisions in Part 1. The Welsh Assembly Government are committed to the same goals as the Department for Education and Skills for England in empowering local authorities and ensuring that parents have a choice and the information necessary to balance their working and family lives.
	As I have mentioned, Part 3 brings together the existing regulatory regimes for childcare and early education in a coherent way in conjunction with Clauses 49 and 50 in Part 3, which provide for inspection of such provision. Part 4 contains important measures on the provision of information and data. To achieve the key objectives of the Bill in improving the outcomes of children, we need to enhance the quality and accuracy of information about children's experiences of early years provision. Clause 99 allows for the collection of individual child-level information to become standard across all local authorities in England, with equivalent provision for Wales in Clause 101, to improve the accuracy of the funding allocation for the free entitlement for three and four year-olds and support the delivery of other services. Those data will be particularly important in underpinning the extended right to free universal provision for three and four year-olds enshrined in Clause 7, which we intend to extend from the existing 12 and a half hours a week to 15 hours a week for all parents.
	In the final part of my speech I shall highlight two other key related issues: the new early years foundation stage framework we are introducing for all young children; and the quality of the workforce essential to delivering it. The purpose of the early years foundation stage is to promote the five Every Child Matters outcomes for all children. Clauses 39 to 48 in Part 3 set out requirements for the new early years foundation stage, comprising "learning and development requirements" and "welfare requirements". Those two elements are equally important. Between them they will set out what providers must do to ensure that children are well cared for and able to develop appropriately for their age. The Effective Provision of Pre-school Education evidence tells us that integrated education and childcare deliver the best outcomes for children, particularly those from the most disadvantaged backgrounds. The EYFS will bring together the existing separate arrangements for care and education and build on the well received foundation stage and the Birth to Three Matters framework.
	The early years foundation stage is intended to ensure quality provision. No matter what provision parents may choose, they need to know that their child will benefit from a good-quality experience. The purpose is not formal teaching or tests, but provision that is play-based and focused on the needs of the individual child.
	Alongside these statutory reforms, we are taking significant steps to improve the early years workforce, which will be key to the successful delivery of the early years foundation stage. An essential part of the 10-year childcare strategy is the transformation fund. Amounting to £125 million a year between 2006 and 2008, it will improve quality without providers passing the costs on to parents. The funding will enable local authorities to increase the number of private, voluntary and independent settings that employ staff qualified to level 3 and level 6. We are aiming to have a cadre of early years professionals, qualified to graduate level, in every full-day setting by 2015.
	I shall say a word about safeguarding. The main changes that we will promote in this area are set out in the Safeguarding Vulnerable Groups Bill, which is now published and will be debated at Second Reading soon. However, Ofsted registration of childcare providers, as set out under this Bill, will also ensure that checks have been carried out on the suitability of those employed in registered settings.
	I have set out the philosophy, objectives and main provisions of the Bill. I look forward to the contributions of noble Lords in all parts of the House as we debate it further in Committee. Our aims are simple: to give every child in this country the best possible start in life from the moment of their birth; and to give parents all the assistance that we can in that vital task, consistent with their own parental responsibility. These objectives are critical to the health and well-being of a modern society. I commend the Bill to the House.
	Moved, That the Bill be now read a second time.—(Lord Adonis.)

Baroness Morris of Bolton: My Lords, I thank the Minister for such a clear and wholehearted introduction. No one could disagree with the principle behind this Bill: to give children the very best start in life should be at the heart of any civilised and caring society. Like many organisations, we welcome the broad thrust of the Bill and support it, but we also share a number of their concerns.
	I declare a number of interests. I am a governor and director of a school which has an 84-place private nursery and provides after-school and holiday care. I am also a former director of Bolton Lads & Girls Club, which was a pioneer in after-school clubs. I have recently become a patron of OXPIP, the Oxford Parent-Infant Project, which is a registered charity working with families who are struggling to cope with the emotional demands of their baby and helping them to form secure attachments. That is an area in which I know the noble Earl, Lord Listowel, has considerable interest.
	The outcome we all want to secure with this Bill is to help parents establish and maintain those loving bonds to ensure that children develop in safe and stimulating environments and are bought up in loving homes. Acknowledging that patterns of life have changed out of all recognition and that the pressures on modern families are very different from those which we might all remember is a part of that.
	Today, only one out of 10 workers works a standard nine-to-five, 40-hour week, and the number of women in work has risen steadily from 43 per cent in 1983 to 53 per cent in 2004. A quarter of all families are lone-parent families, and of the other three quarters that are couple households, both parents work in the majority of them.
	Families survive—in fact, they thrive—because of a whole host of arrangements that would have been unimaginable 20 or 30 years ago. For that reason, it is more important than ever for us to develop policies that recognise the way people live their lives today and that are flexible and responsive enough to meet their complex needs. That is why we must ensure that government policy is joined up, and works for families as a package across the whole of government. Along with a number of your Lordships I have also been involved in the Work and Families Bill. Here we have just discussed at length work/life balance and the benefits and success of flexible working, where many employers and companies are ahead of legislation in offering working styles that allow parents a chance not only to provide for their families but to spend time with their families.
	When the Childcare Bill was debated in another place my right honourable friend Theresa May expressed surprise that the issues of work and families and childcare were being discussed in two separate Bills and reflected that it would have made more sense to debate them together to ensure joined-up legislation to address the issues that families face. I agree with her. Each of these issues has a significant impact on the other and on the lives of families across Britain. Indeed we must also consider the read-across to the Safeguarding Vulnerable Groups Bill which the Minister mentioned and is starting in your Lordships' House next week. As I have said on many occasions in numerous debates, the safety of a child, especially a vulnerable child, is of the utmost importance. However, there is a fine line between protecting our children and stifling normal life and activity. This is an area we will want to discuss at length in the Bill and in the Safeguarding Vulnerable Groups Bill.
	In the introduction to the 2004 document Choice for Parents, the best start for children: a ten year strategy for childcare, the Government say:
	"Parents are the best judges of their family's needs".
	I could not agree more. It is parents who know what is best for their children, not Ministers and not civil servants. It is parents who should be in control of their childcare choices. We have to trust parents to make the right decision, yet I am afraid that, despite the rhetoric, trusting parents is something that this Government sometimes find hard to do.
	Parents do not want to be told what type of childcare they should have. Mothers do not want to be told by government that the best thing to do is to race back to work as soon as their baby is born. Nor do they want to be told to stay at home indefinitely producing more and more children. They want to decide. Our role as politicians is to support the choices they make. As everyone's aspirations are different, those choices will vary dramatically from family to family. Childcare should be as varied as the families it serves, and because of the different needs and decisions of families a "one size fits all" policy will not work. Yet that is what we are in danger of seeing from this Government—a desire to force children into the form of childcare that Government think is preferable, rather than widening the choices available to parents.
	The Government say they want local authorities to work with existing providers, and yet the facts are that for every two childcare places that the Government have opened since 1997 another has closed somewhere else. Rather than complement and add to existing childcare provision, state-funded Sure Start is all too often forcing independent providers to close their doors, unable to compete with well funded schemes.
	We are supportive of Sure Start and applaud much of what it has achieved, but Sure Start does not suit the needs of all parents. Government provision is leading to the closure of private and voluntary-sector childcare services that offer smaller groups and more flexible care. In January 2004, a survey of private and voluntary-sector nurseries showed an occupancy level of 85 per cent, which has now fallen to 75 per cent. In order to be viable, childcare organisations need an occupancy rate of at least 80 per cent. In case anyone thinks I am special pleading on behalf of the nursery I am involved with, I should say that our nursery is full and there is a waiting list for every place.
	One of the areas where the private and voluntary sector is particularly struggling is after-school clubs. The introduction of extended schools has had a particular impact here, and yet when my noble friend Lady Shephard of Northwold first introduced after-school clubs, as well as providing much-needed childcare, she was also keen to promote small and social enterprise.
	I recognise that Sure Start has helped to provide children's centres in some of our most deprived areas, but it currently focuses only on the most deprived fifth of wards. Yet, government figures show that 46 per cent of the most deprived children do not live in those wards. Too many parents who could benefit from Sure Start or a similar project are denied it—often because, by not working with the private sector, Government are not making the best use of resources. The voluntary sector and private companies should be helped to increase the variety and quality of choice available. I hope Ministers will realise that only by working with them, rather than by competing against them, can we ensure that the government resources put into childcare deliver value for money.
	This Bill seeks to reduce inequalities between children, which raises some fundamental questions. During its passage through another place there were long, spirited and principled debates about what exactly reducing inequalities means and what that entails. How will that be measured and by what means will it be delivered? We on the Conservative Benches are in no doubt that the best way of helping our most disadvantaged, vulnerable children is to raise the standard for all children. I really look forward to the debates that we shall have on that issue in further stages of the Bill.
	Since all the research shows it, there can be no doubt that good early attachment is the best possible start in life that a child can be given. We were very pleased, then, to welcome extended maternity leave in the Work and Families Bill. We also support the choice that many families make—most families, indeed—in using informal childcare through grandparents, other members of the family or friends. Yet we also recognise that there are undoubted benefits to formal early years care, the most important being the building of confidence and social skills. Those are particularly significant for the most vulnerable families and children. The chance to release the pressures of bringing up children who are going through the terrible twos could be a lifeline for many such families. Therefore, what assessment have the Government made of the needs of children whose parents are not working?
	I know that in his speech the noble Lord, Lord Rix, will raise, with his usual passion and conviction, the crucial issue of childcare for families of children with mental and physical disabilities. I recently visited Hurdles, a charity in the north-west that supports such families. I simply cannot explain to your Lordships what a humbling experience it was. I met parents of children with a whole range of disabilities; truly amazing people. The chairman, Geraldine Greene, said to me, "Trish, in an imperfect world we're not looking for perfect solutions, simply the support and help to do the best we can for our broken children". We share the concerns of the noble Lord, Lord Rix, regarding the cut-off point for childcare being at 16 for children with disabilities and will want to look at that in more detail in Committee.
	I want to raise two further points. First, we remain concerned about the Government's intentions for a foundation stage from 0 to 3 years, where Ofsted inspectors will check that children are developing according to the government programme. It is vital that all Ofsted inspectors in that area are not only properly trained in early years development but understand their surroundings. We discussed this at length in passing the Education Act 2005, but my fears were recently confirmed by the story of a nursery where the inspector noted that the children did not seem to be making use of the materials put out for them. The nursery owners pointed out that this may have had something to do with a pin-stripe suited gentleman—a stranger—sitting and observing the children at the end of the table where they were expected to play.
	However, our main concern in this area is about the word "taught". So far, Ministers have failed to convince us that that will not mean ever-younger children being forced into academic activities—and, as a result, missing out on natural development through play and taking risks. Deborah Lawson, the section committee chairman for PANN, the Professional Association of Nursery Nurses, has warned that,
	"It is important to find the right balance and not have unrealistic expectations of what young children can achieve . . . Prescriptive formal education can be too much . . . for children under five".
	Margaret Morrissey of the National Confederation of Parent Teacher Associations said on BBC News last November that,
	"We are now in danger of taking away children's childhood when they leave the maternity ward. From the minute you are born and your parents go back to work, as the Government have encouraged them to do, you are going to be ruled by the Department for Education".
	Finally, with many of us currently receiving our council tax demands and looking forward to local elections in May, it would be remiss of me not to raise the genuine concerns of local authorities across the country. The Bill places a new duty on them to secure, and I quote from the Explanatory Notes,
	"as far as is reasonably practicable, sufficient childcare to meet the requirements of parents . . . who require childcare in order to work or to undertake training".
	Surely Ministers do not believe that we can expect local authorities to take on these new obligations without that having an impact on their budgets. The Local Government Association estimates that meeting the requirements in the Bill will require additional investment of £200 million in the next two years, over and above existing resources. It would be unacceptable to expect council tax payers across the country to foot the bill for this key government policy. I hope that the Minister will explain how these obligations on local councils are to be paid for.
	My party is happy to work constructively with the Government to improve the Bill. We recognise that for many families the decision about whether to go out to work is not one of choice, but necessity. For many families, childcare is the most important issue. If their childcare does not work, their lives simply do not work.

Baroness Walmsley: My Lords, I, too, welcome the Bill as a step in the right direction for young children and their parents, especially in its aim of reducing inequality, and I thank the Minister for his clear explanation of its contents. So let me get straight into the nitty-gritty of the Bill.
	We on these Benches come at this issue, not from the point of view of working parents, but from the perspective of the child and its welfare. I accept that parents living in poverty is not a good thing for any child; so the objective of reducing economic inequality is welcomed. However, we need to strike a balance between measures that appear to encourage mothers to return to work when their children are very small and the real need to provide enough high-quality childcare where and when it is needed. The emphasis on working parents worries me, too. I want parents to have a real choice, not a situation that is forced upon them by financial expediency; and here I refer to some of the debates we have been having on the Work and Families Bill in the Moses Room about the levels of maternity benefit.
	If a mother chooses to return to work as soon as she can after the birth of her child, we need to support her choice for the sake of her child with the best quality affordable childcare we can manage. If she chooses to stay at home and look after her child herself, we need to support that choice, too, with the best possible financial benefits we can manage plus high-quality, occasional childcare to help the child develop its social skills and also support and know-how in parenting for all parents. That is the ideal world as far as I am concerned.
	So, how does the Bill measure up in relation to that ideal, given that maternity benefit is well beyond its scope? It is moving in the right direction, but I have some serious concerns about how it will operate. First of all, good childcare does not and should not come cheap; and this Bill is meant to be revenue-neutral. There is no additional money above that which the Government have already announced for the sector. I pay tribute to what the Government have done up to now for the early years sector—as was listed by the Minister. They are well-meaning and well-advised to do so, given the findings of the EPPE study, to which the Minister referred, about the benefits to a child's development of good quality early years education. There are also long-term benefits in early identification of problems so that the right sort of intervention can be arranged.
	However, the Government seem to think that the integration of services will itself generate enough savings to fund all the new duties that the Bill is putting on local authorities. I do not believe that this can be done and, given that the money for early years is not ring-fenced, I wonder how the Government intend to ensure that local authorities are adequately resourced to carry out all these new tasks to a high standard. Only last week I had a meeting with a range of professionals working in the field and they do not believe that it can be done.
	My second main concern is how the new arrangements will contribute to the provision of high quality and not just Ofsted's minimum standards. I hope that, although some later years providers will not have to register compulsorily, we will develop a culture in which they will actually want to register, as a mark of the quality of the care they provide. I am a little concerned that the whole area of registration and having two registers, with some people on both of them, will prove confusing—both for parents and providers alike. Perhaps the Minister could give us an idea of the level of fees which providers will have to pay in order to register.
	I am concerned about the part of the Bill which allows the Secretary of State to exempt certain providers from the need to register; for example, crèches which take children for less than two hours. Although it is often said that children are not there for long and the parents are usually nearby, I believe that some children are put in these crèches regularly, and the parents are not always easily accessible. How will the Government ensure their quality if they are not required to register? We need absolute clarity about the circumstances under which the Secretary of State will authorise exemptions, especially since there will be no parliamentary scrutiny of it.
	In relation to quality, there is an enormous task to do regarding the standards and qualifications of the early years workforce. Buildings and equipment, including an outdoor play area, are important. But it is the people that matter more than anything else. According to the Explanatory Notes, the local authorities are being given a duty regularly to assess demand for and availability of local childcare provision and to support local childcare providers with information, advice and training. How can they do this without adequate funding? The transformation fund provides only £500 per worker for two years. This is not enough to secure the training needed when we are starting from such a low base. This is an area of notoriously low pay, which encourages a high turnover of staff. This is not good for the children in their care. If we are to up-skill the workforce, they will want to be paid more for their qualifications and we will have to face this while still making childcare affordable.
	If childcare is to be affordable for the parents we cannot expect private providers to pay for all the necessary training themselves, since they will only pass on the cost to parents, especially if their occupancy rate is below 80 per cent. Neither must we just think about nurseries and playgroups. Childminders in England, like those in Wales, should have to undergo at least a pre-registration training course so that we can be sure they have reached a minimum standard, particularly in the area of child safeguarding. We need to ensure that all those caring for children undertake an approved course on child safeguarding, but where will the money come from?
	Inspection regimes are important levers to improve quality and early years is no exception. However, it is vital that the standards against which inspection is done are sufficiently high and that the inspectors themselves have the right training, qualifications and experience to understand what they are seeing. I thoroughly agree with what the noble Baroness, Lady Morris, said on that point. We do not want situations such as the one she described and like the one I heard about recently, where an inspector criticised a nursery setting for not using worksheets for the children.
	I welcome the new clauses added to the Bill in another place to make regulations disqualifying from registration people who have been banned from working in schools on grounds of ill-health such as alcohol or drug misuse and also those who have been convicted or cautioned of a prescribed offence. Can the Minister tell us a bit more about what is included in these prescribed offences? However, while I generally welcome these measures, I have a concern about what they will mean for very young offenders. A "caution" is defined in the Bill as including a reprimand or warning under Section 65 of the Crime and Disorder Act 1998, which applies to children between the ages of 10 and 17. Does that mean that if a child of that age commits a prescribed offence and gets a warning, he or she will never be able to work with young children or vulnerable adults when they grow up? If so, we need to think again about this. Something done by a child before his moral personality is fully formed should not prescribe his future career in that way.
	One of the Bill's main and laudable aims is to reduce inequalities among children so that they all have the best possible start in life, no matter what their parents do. This raises issues, in particular, about children with disabilities, ethnic minorities and other groups, about whom I will say more later. The Bill puts a duty on local authorities to ensure that enough childcare is provided in their area, but it also gives them a duty to reduce inequalities. So is it just about numbers or is it about quality and the appropriateness of childcare for individual children?
	As the noble Baroness, Lady Morris, said and as other noble Lords will undoubtedly know, there is a lot of concern among the lobby groups that represent disabled children about whether the Bill will make the difference that is needed. The UN Convention on the Rights of the Child states that disabled children are special and need special help so that they can develop to the maximum possible extent and be socially integrated.
	We all know that there is not enough care of the right quality for disabled children. Eighty-four per cent of their mothers are not in paid work as against 39 per cent of mothers of fully able children of the same age. Caring for young children with disabilities requires special training, and we have heard, in particular, from TreeHouse, the National Autistic Society and Mencap, among others, about the needs of the children they represent. I will be either tabling or supporting amendments to ensure that these children are properly catered for. The words "appropriate assistance" for such families have a very particular meaning and we must take account of that.
	There are also issues relating to the inequalities suffered by ethnic minority groups, such as travelling people, black and Asian people, refugees, asylum seekers and those without English as their mother tongue. Although assessment and monitoring already takes place under the Race Relations (Amendment) Act 2000, and soon there will be monitoring in relation to disability and gender, we need to be certain that not just future but existing provision is monitored to ensure that there is no discrimination. This needs to be done by people who really understand the issues. Not least is the need to be sensitive and to make provision for the cultural heritage of children in early years settings. Children will never be truly comfortable if no one understands their background and culture. This is a matter to which local authorities will have to pay attention.
	We also need to make certain that through outreach local authorities ensure that all services are accessible to all communities that need them. That will be a challenging task for the extended Children Information Services. I hope that it will also tell parents about the range of financial assistance available to them to help with the high cost of childcare, particularly here in the capital. Much more than just childcare tax credit is available out there and people need to know about it. I give credit to the Government for the help that has been made available, but, as usual, it is not enough.
	As noble Lords will have heard from what I have just said, the duty to improve outcomes for all children will be a complex process. It is not a matter for which it is appropriate to set national targets. However, it is perfectly appropriate to monitor the performance of local authorities, and if additional measures are needed to do that, so be it. However, I am a bit doubtful about whether anything more is necessary beyond Ofsted, the Commission for Social Care Inspection, the new joint area reviews and the race, disability and gender monitoring, to which I have already referred. Perhaps the Minister will consider that point.
	I now turn to the subject of the child, who has been at the centre of all I have said. We are aiming to improve the situation for each child in relation to the five outcomes of the Every Child Matters agenda, but it is hard to see how the Bill addresses "children making a positive contribution". Children are notably absent from the list of those that local authorities should consult under Clauses 3(4) and 11(6). The Minister has told me that that is because it is all about planning and co-ordination, where facilities should be placed and how the various agencies should work together. But it is hard for me to agree that a Bill that makes such far-reaching provision for children should not include somewhere the need to consult them, especially when the clauses to which I have referred contain the magic words "all reasonable steps". I shall be looking for an appropriate way to correct that as the Bill progresses through your Lordships' House.
	The other big issue relating to the nature of children themselves is the early years foundation stage, introduced in Clauses 39 to 48. That framework, which brings together earlier frameworks, is generally to be welcomed and has been so by most professionals, despite the best endeavours of the tabloid newspapers which have referred erroneously to a curriculum for babies. I am sure that the Government intend no such thing. However, although I would disagree with the terminology of the tabloids, I also disagree with the terminology of the Bill. Tone of voice is important if one is to communicate what one really wants to happen. Young children learn by being supported to play and to explore the world around them, making sense of it and expressing their understanding and feelings about it.
	Article 31 of the UN convention is particularly relevant, as it provides that children have the right to rest and leisure and to engage in play and recreational activities appropriate to their age. Therefore, those principles need to be better reflected in the wording of the Bill; for example, a child should learn through play rather than being taught, as in Clause 41(2)(b), and should be assessed by observation rather than being tested, as in Clause 41(2)(c). I shall be tabling amendments containing what I and most professionals in the area believe to be more appropriate wording.
	I have mentioned exemptions before and here is another place where they give me cause for concern. Clause 46(2) allows providers to exempt particular children, presumably disabled children, from the EYFS framework. I believe that that may infringe their rights under Articles 23 and 29 of the convention. We should be ambitious for all children, while accepting that some of them will not be able to do some things as well as others, but that should not prevent them from being included in the ambitions that we have for all children.
	Next, I echo the concerns of the noble Baroness, Lady Morris, on sustainability of nursery places and how local authorities will work with all providers in their areas to provide a healthy mixed economy of provision. I was horrified to learn that between 1990 and 2003, 626,000 new places were created of which almost half were lost by becoming unviable and closing down. What a lot of wasted expertise. We must ensure that the development of children's centres, the rollout of Sure Start and the creation of more extended schools do not result in reduced choice for parents because private and voluntary sector providers close down. Local authorities need to adopt best practice, which I know exists in places, and to work in partnership with their local providers to ensure that there is not a proliferation of new places where others of the appropriate type and quality already exist.
	The word "appropriate" is very important. It appears in Clause 8(3)(b) in relation to whether local authorities can provide maintained-sector childcare in their areas. They cannot do so if someone else is willing to provide it, unless it is "appropriate" for the local authority to do so. As the Bill progresses, I shall explore what the Government mean by that word, what standards will apply and what safeguards will be in place.
	The fact that schools that provide childcare are exempt from certain parts of the Bill is a matter that we shall want to explore. What is to prevent the new independent, but state-funded trust schools or academies acting independently of a local authority's planning system and providing childcare, completely upsetting the balance of the local mixed economy? What is to stop them providing it at any price? It could possibly become a loss leader to encourage parents to send their children to the school. What would that do to the equilibrium of the local market and all the hard work done by the local authority? The ability of the local authority to plan provision sensibly should not be fettered. It is particularly important in rural areas such as parts of Wales—which is also covered by some clauses of the Bill—where distances to travel to suitable provision can be very great.
	Finally, there are questions to be asked about the child's right to privacy and how that relates to the data collection measures in the Bill. The measures are very wide-ranging and I wonder whether any of this will duplicate Section 12 of the Children Act 2004; for example Section 12(4)(b): the information about the child's education. The Government say that these data are needed for two reasons: first, to allow funding to follow the child and, secondly, to allow local authorities to prove they are carrying out their new duties.
	The child's right to privacy must be properly balanced by the Government's perfectly proper right to have appropriate information by which to monitor the effects of policy and I am concerned to get that balance right. As things stand, Clauses 99 to 101 seem to me like a sledgehammer to crack a nut, despite the ban on publishing names. Who will be prescribed to collect and share the data; and what data will be permitted to be collected? I expect all this, like so much in the Bill, will be prescribed in regulations, a matter about which my honourable friend Annette Brooke complained bitterly in another place. However, perhaps the Minister can enlighten us, since we cannot properly scrutinise the Bill unless we have this information.
	I close by promising the Minister that we on these Benches look forward to scrutinising the Bill with great care and vigour, extracting a lot more information from him over the coming weeks and, I hope, sending it back to another place considerably improved in the interests of all our children and their families.

Lord Rix: My Lords, I declare an interest as president of the Royal Mencap Society. I welcome the opportunity to speak in this debate, in which I want to highlight one issue in particular; namely, the care provided for disabled young people over 16 and their families. I am delighted that the Minister has indicated his willingness to discuss the matter fully some time after Second Reading. I was also delighted to hear the support voiced by the noble Baronesses, Lady Morris of Bolton and Lady Walmsley.
	All parents should be able to access the childcare they need in order to work and provide for their families. That is the governing principle of the Bill and I am sure it is welcomed on all sides of this House. I am sure also that we welcome the fact that the Bill recognises and accommodates the need of some parents to access childcare for longer than others. While most children will be sufficiently independent by their early teens to look after themselves outside school hours and to manage without formal childcare, most disabled children will not. That, I am sure, is the logic of the distinction the Bill makes between disabled and non-disabled children.
	As your Lordships will be aware, the Bill gives local authorities a duty to secure sufficient childcare for non-disabled children up to the age of 14, and for disabled children up to the age of 16. The principle is therefore made clear: disabled children need childcare for longer than non-disabled children. But the question arises: why 16? In other legislation designed to help parents to work, the parents of disabled children are supported up to the age of 18. The Employment Relations Act 1999 gives parents of disabled children up to the age of 18 the right to up to 18 weeks' parental leave, to be used flexibly throughout the child's life whenever it is most needed, from birth to 18 years. And the Employment Act 2002 gives parents of disabled children up to the age of 18 the right to request flexible working hours to meet their care needs. Why 18? Because families with disabled children still need that support up to the age of 18. Why have a different age limit in the Childcare Bill?
	Consistency in legislation is generally sensible, but it is not only for the sake of consistency that the Childcare Bill should secure care for the families of disabled children up to the age of 18 rather than 16. Disabled young people aged 17 and 18 are too old to access most childcare and too young to access adult services which are in any case not set up to meet the needs of working families. They fall into what we might call the "care gap".
	We know that that care gap exists for disabled children as young as 12, but the problem gets more acute as they get older. The Sure Start survey in 2003 found that there were major gaps in childcare provision for the families of disabled children aged 14 and older. Many of them were directed towards leisure centre activities that were wholly inadequate for their needs, being insufficiently staffed to cope with disabled children and with sessions which did not fit in with the timetables of working parents. According to Contact a Family's 2002 survey, Everybody Here, 70 per cent of disabled children aged 12 to 19 cannot attend a club because the facilities are not suitable for them.
	The care gap makes life difficult for the families of older disabled children in general, but the parents of young people with profound and multiple disabilities have the greatest difficulty finding any kind of childcare. Only in exceptional cases are they able to work when their children get older. They cannot use the informal out-of-school services used by non-disabled young people of their age because the staffing is insufficient. Most childminders will not take them on. Where are they supposed to go, or, to put it another way, where are their parents supposed to go?
	In many cases, their parents admit defeat. They give up their paid jobs, and devote themselves to caring for their children full-time. We know that 84 per cent of mothers of disabled children are out of work, compared to 39 per cent of mothers of non-disabled children. We know that 55 per cent of families with disabled children are living in or at the margins of poverty and, indeed, that if the Government had only paid more attention to their needs, they might not have missed their target for cutting child poverty. Providing such families with childcare will help, but why stop that help when the child reaches 16?
	Take the case of a mother known to Mencap in Wakefield, whose 17 year-old son has a learning disability. She used to work, but had to give up when her son left school. He attends a day centre until 3 pm every day, but there is no wraparound care available from 3 pm to 6 pm, or during the holidays, to allow her to continue to work. She would like to work again, but it is impossible for her to do so without the support of a reliable childcare service. So she loses the ability to provide for her family, she loses the ability to do a job she enjoys and for which she is valued, and the country loses her contribution as a worker and—the Government should take note—as a taxpayer. Her work as a full-time carer is invaluable, but it is unpaid work that she does through necessity. Yes, she does it through love, but not through choice.
	So why not raise the age limit for local authorities to secure sufficient childcare for disabled children from 16 to 18? In a debate in another place the Minister, Beverley Hughes, said that 17 and 18 year-olds might not want to be regarded as needing childcare. Well, maybe not, but for many disabled young people, the service they need at 17 is exactly the same as the service they needed at 14 and 15 and 16. In any case, very few people who provide childcare services, or who use childcare services, call it childcare. Take Dwaine, a 17 year-old young man with a severe learning disability who is fortunate enough to be cared for by a childminder after school five days a week, supported by the local Mencap-run childminding network, while his mother works for Bromley Council. Dwaine never calls it childcare. He refers to his childminder as "my mate". But he can call her whatever he likes: the point is that his mother is able to work, and he has somewhere safe and worthwhile to go while she does so. It would be a great shame if, for want of a name, the opportunity was lost for more families like Dwaine's to get the care they need. The Bill presents a perfect opportunity to provide that care and to close the care gap that opens up when a disabled child reaches 16. It presents a perfect opportunity to help families to work and to help families with disabled children to get out of poverty. It presents a perfect opportunity to harmonise childcare legislation with other laws that provide support to working families with disabled children. All in all, it presents an opportunity not to be missed, and I hope the Minister will agree that the Bill should cover disabled children up to the age of 18. I shall certainly move an amendment to that effect at a later stage, unless the Minister and the Government decide to pre-empt me. Given the Minister's opening speech, I am sure they will give my heartfelt pleas every sympathetic consideration.

The Lord Bishop of Chelmsford: My Lords, I, too, declare an interest in that, as a bishop, I oversee rather a lot of services for children, families and schools in the diocese. Sitting on these Benches, one is not always excited by the legislation that we get involved in, but I must tell the Minister that I am really quite excited by the possibilities presented by the Bill. It seems that, in this Bill, Parliament is doing what it is best fitted to do—namely, to improve the lives of a large number of people who need our support and help.
	Parents have always sought help and support in the nurture and development of their children. One only has to think of schools, nannies, nurseries, grandparents, childminders, babysitters, voluntary societies, parents and toddlers' groups, uniformed organisations and so on—the list is enormous. Spreading out from these networks is a responsibility on the whole of our society to ensure the best support that we can achieve for parents in the care of their children. As the chairman of Christian Aid, I know all too well how disastrous it is for children when the structures of support and nurture collapse through poverty, oppression and disease. One only has to visit other parts of our world to see how important such structures are.
	I was especially pleased to find that the Bill places on local authorities a duty to reduce inequalities in this field. Let us not be deceived into thinking, however, that passing this Bill will achieve greater equality of opportunity and experience. Travel with me across the diocese of Chelmsford. Day one is spent in Thurrock, which I visited around the previous general election, passing through a community without a single sign of a general election taking place or of any interest in it. You wonder how parents of children in some of the poorest, most deprived and forgotten communities in our country survive. On day two, I am on the M11 corridor, where the houses get bigger every week and where you visit schools, churches and communities and find flourishing children with plenty surrounding them and plenty of support. On day three, I am in the borough of Newham, which is reputed to be one of the most multicultural boroughs in Europe; it certainly has one of the lowest age ranges in Europe. It has Sikhs, Buddhists, Muslims, Jewish people, Christians of all shapes and sizes, and people of no faith from hundreds of different cultural backgrounds. That is the diversity that we are dealing with, so equality, as the noble Baroness, Lady Morris of Bolton, quite rightly said, should be central to any debate on the Bill. I would add to that by stressing the importance of improving everyone's opportunity and by saying that the Bill must focus provision on the poorest and most vulnerable.
	Secondly, I want to comment on the process of working in partnerships, to which the Bill seems strongly committed. Words on paper need to lead to commitments to action. In Essex we are becoming used to public language. For example, we now talk about "sustainable communities" as Essex goes through one of the largest developments in our country at this time. I can tell your Lordships that those on the housing estates that are going up will want to know what the Government meant by that phrase as frequently only housing is built. So when we talk about "partnerships", what is the content? How will it work? I have been a bishop for more than 11 years and every time governments and local authorities talk about working in partnership I get excited about it, wake up and ask what will happen—and often it is not a great deal. Do we not need some structures to enable these partnerships to take place?
	Churches of all sizes and shapes are present in every local community. I have visited Sure Start projects in church buildings, Home-Start projects and a whole variety of services to children and parents. Churches represent volunteers, many of whom are sustaining these projects, and Churches also represent an understanding and experience of their local communities, along with their partners in the other faith communities, which we need to draw into this framework. So I hope that we will have some kind of commissioning framework which will make this possible.
	I wish to suggest three themes. The first is parents and parenting, which are pivotal to a child's development. We all know that children suffer through poor parenting and that poverty and disadvantage undermine that task even more so. What do the Government propose to do, following this Bill, to ensure that households that most need support receive it in this field? I was pleased to see the provisions with regard to disability and I am sure that we shall debate the kind of issues brought before us today by the noble Lord, Lord Rix. It is good to see such provisions in the Bill, which will give us an opportunity to see how far we can go.
	Secondly, I support the comments of the noble Baroness, Lady Morris, in regard to development. I have chosen the word "development"—not "education"—because the comments that have been made about play, nurture and whole development need to be understood in this context. I am delighted that we will be registering people and services and to see the word "training" in the Bill. What will be the content? What standards have we in mind; what expectations? How are we going to fill the word out so that we can offer to parents a real guarantee of excellence in these services?
	My third theme relates to social skills or socialisation. One of the things that can be achieved through the provision of childcare services is the development of children's social skills, including enabling children to relate across the diversity of our social life today, with children from different cultural and religious backgrounds and children with different life and social experiences. These are important ways in which at an early stage we can make provision.
	My final question is a practical one which has already been raised: who is going to pay for all of this? I hope that Her Majesty's Government do not think that we can achieve what the Bill is all about without investment and fresh resources for agencies and people who are committed to improving the life of children in our communities.
	These are important matters. If, as many of us believe, children are close to the heart of God, they should be close to the task of government and of this House. I often think that we spend time on legislation to little effect. Today we have the opportunity to begin something useful, morally defensible and of help to our society. I hope the Bill receives a fair wind.

Baroness Howarth of Breckland: My Lords, as the Minister said in his introduction, parents face difficult choices in our competitive society. Whether you are a single mother or father, struggling to care for your child and remain independent, or a two-parent working family trying to give your children a good start, or another type of carer, how do you give your child that good start? Most parents and carers want the best for their children. When they hand them over to the care of others, they want to be sure that they have chosen well. But how much choice do they really have? The question of choice is one we should dwell on.
	Day nurseries or day centres are often parents' most popular choice of childcare, providing as they do care and learning for hundreds of thousands of children under five. How easy is it, if you are poor or vulnerable, or find it difficult to make contact, to actually achieve a place? I speak from personal experience of working with young women who often simply cannot get into the system because of their very serious difficulties. I know there are still those who would have parents—usually mothers—stay at home, but the world has moved on. The social benefits of work and the economics of family life mean that most people must look elsewhere to ensure much of the daily care of their young children. This is why I welcome the aspiration of the Bill, even if I have concerns about its implementation and spread.
	There are significant questions to be asked of a Bill with such vision, set out so eloquently and with such enthusiasm by the Minister. It reflects the Government's concern to provide accessible, affordable and flexible childcare, as outlined in the 10-year strategy. It seeks to ensure that from 2008 local authorities will be required to secure "sufficient"—whatever that means—childcare places within their area by facilitating and managing the provision. There is no doubt that for many this has been an aspiration for decades. What has prevented these ambitions being realised are the same factors that will dog the Government's attempt to reach their goal, unless addressed at an early stage.
	Perhaps I may put some questions to the Minister. Under the financial cost heading the Explanatory Notes state:
	"The proposed duties on local authorities in England will be financed within the resources which have already been made available to them for childcare and early childhood services".
	They continue:
	"The Bill will have comparatively little effect on public services manpower".
	What do those statements mean? As an aside, given that childcare staff are mainly women, would it not be more progressive to refer in documentation to "the workforce"? I thought "manpower" went out of the window long ago. There is little doubt that meeting the requirements of the Bill in the spirit in which it is written will need both highly trained, valued and well-paid workers, and considerable resources. I simply emphasise what others have already said.
	The third key to success is management of the programme. I worked in local government for many years. I have great admiration for all that local authorities achieve, but I have some concerns about the way some are taking this issue forward. In developing the childcare market, the Government appear to have an enthusiasm for a mixed economy, building on the sound foundation created by private, voluntary and independent nurseries. In Clause 8(3) the Bill specifies that the local authority may not provide childcare unless it is satisfied that there is no other person willing to do so. Research by the National Day Nurseries Association reveals a mixed picture of the ways local authorities are already expanding their own daycare services. There is a real question as to whether provision has increased or simply that ideology and the label of "provider" have changed. I will not repeat the figures already given by the noble Baronesses.
	I understand that the current plan is to roll out some 3,500 new family centres across the country in three waves. Will these be new provision, or will they simply replace existing places? I have been long enough in the service to remember that when the original Sure Start programme was put in place, many well run, much loved local family centres lost their funding and closed. And what happened to playgroups when schools started having under-fives provision?
	A recent Written Answer about the opening and closing of places shows a huge turnover. Apart from the loss of value for money through poor sustainability, high turnover means a lack of consistent care and of development of workers, which cannot be in the best interests of our children. I understand that the National Audit Office will publish a report in the autumn looking at some of the issues. Will the Minister expand on how the Government see local authorities developing their role, not principally as direct providers, but as commissioners and overseers of the programme? Will the Audit Commission report provide a clear evidential base which will be used by the Government to ensure the proper development of an integrated and well managed mixed service?
	I turn to my concerns about commissioning. This has been a real problem for much of the private, voluntary and independent sectors across the whole of childcare provision. The Bill could provide an opportunity to improve commissioning practice. Of course there are model commissioners, but much of the sector experiences unequal treatment when tendering for contracts. The Minister for children has introduced a commissioning framework in other childcare services, and although the Bill sets a general framework, the National Day Nurseries Association believes that draft guidance is needed urgently, as a good few local authorities have not followed existing recommended practice.
	Legislation might also allow for penalties on local authorities neglecting partnership opportunities in the interests of increasing provision rather than replacing one set of places with another. What PVI providers require is a level playing field which is transparent and frees up time from interminable contract meetings and complex bureaucratic procedures, which get nowhere and simply put money in the pockets of lawyers. In addition, many local authorities do not allow other providers at the tendering table when they are tendering. This seems extraordinarily unequal.
	On the topic of a level playing field, why is provision in local schools outside the local framework outlined in Clause 8? If the local authority is seen as the strategic leader and commissioner of childcare rather than the provider, why is it excluded from making a judgment about childcare provided in schools? That simply increases the inequalities between local providers. My particular concern, with which the Minister is all too familiar, is that this again sets schools apart from the main thrust of local planning—education knows best again and is set apart. This will not allay the fears of all of us who believe that the education takeover will lose the focus on the whole child, despite the assurances in the Bill, and on safeguarding, leaving only its learning.
	The Local Government Association has similar fears. To that is added the concern that setting targets centrally will not improve outcomes or a holistic approach to outcomes. Will the Minister concede that there is a real danger of targets hampering the delivery of child-centred, personalised services? Is it really appropriate to measure whether a four year-old is making "a positive contribution"? Can we not let children be children for just a few short years? That does not mean that we should not consult them. I have considerable experience of working with very small children and finding out what they think, but you do not do it by measuring what kind of contribution they are making.
	Time does not permit me to raise the issues of the speed of change, the importance of a well trained, remunerated and valued workforce and the plans that one has for them, or how this all fits into the Every Child Matters agenda. No doubt we will return to these issues during the passage of the Bill. But to quote Naomi Eisenstadt talking about the whole children's programme:
	"Creating the conditions for improvement and change across this huge agenda depends on the stability of its parts, it is not rocket science, it is far more difficult than that".
	I would simply add that the Bill is a significant and important part and we have a duty to ensure that it is stable and the best that it can be for the future of our children.

Baroness Howe of Idlicote: My Lords, I like to think of the Government's Childcare Bill as one of two twin Work and Families Bills, both of which, along with many of your Lordships, I largely support. Both Bills are part of the Government's welcome, ambitious and far-sighted 10-year strategy, as set out in the 2004 report, Choice for parents, the best start for children. The Government deserve congratulations and they certainly get mine.
	The Bill will undoubtedly be a big help to families by giving parents access to the childcare services that they need and allowing them to balance more easily the demands of both their careers and families. As others have said, the Bill's provisions rightly target for extra help those working families with multiple needs and those with disabled children. That list, over time, needs extending, as there are many vulnerable children in non-working households. But there are some real concerns about what is proposed, not least, as we have already heard, about the role of local authorities and how they will exercise their proposed new duties to secure rather than provide themselves sufficient childcare for their areas.
	Your Lordships will have noted the considerable anxiety throughout the voluntary and private childcare sector about its future within this structure. There is good reason for that. We owe a tremendous vote of thanks to the voluntary and private sector for its determined, sustained and, in the end, widespread pioneering efforts, from the end of World War II onwards in providing an increasingly flexible range of childcare. For that reason, we should pay particular attention to its concerns about the Bill.
	After World War II, the UK government decided to close what had, up to then, been almost universal childcare provision, made available so that mothers could play their full role in munitions factories and elsewhere in support of the war effort. But in contrast with what happened after World War I, women were no longer content just to return to their domestic roles. The push for equal opportunities in employment and in pay had begun in earnest and with it an inevitably growing demand for reliable childcare places.
	For a mother such as myself, involved in the late 1950s in the playgroup that our own children attended and as the author of a pamphlet on this subject entitled Under Five, the inadequacy of provision was all too clear. So too was the lack of financial support from most local authorities for those attempting to start voluntary groups. The great pioneering champion was the Pre-school Playgroups Association with the amazing network of grass-roots playgroups that it built up nationwide. By involving and training mothers in running those playgroups, those mothers gained the confidence that was invaluable to them and their children later in their lives.
	The vigorous campaigning of the PPA and others eventually worked. The Department of Education and Science Circular 8/60, which had prevented local authorities opening any new nursery facilities of their own, was finally withdrawn. The name of the Secretary of State for Education and Science who deserves full credit for that action was none other than Margaret Thatcher. It is certainly time that the less than flattering one-liner that remains attached to her tenure at the DES is replaced with the recognition of that considerable achievement.
	What already exists in childcare is one example of the blueprint that this Government are determined to bring to areas where those most in need of the services have repeatedly been let down. In education, in the National Health Service and indeed in the management of offenders, the rescue plan is roughly the same: to bring in extra financial help and expertise from the private and voluntary sector and let competition, privatisation or contestability—depending on your political interpretation of those words—have its way. There are certainly problems with this radical solution, but with childcare, where private and voluntary initiatives—PVIs—have been and remain major players, there is a real opportunity for the Government to demonstrate the kind of partnership that works. Certainly we should be encouraged by the Bill's apparent enthusiasm for the mixed economy and for partnership between local authorities and private and voluntary providers. Clearly, it makes, as other noble Lords have said, no sense whatever for the state to reproduce what is already working well in the private and voluntary sector. However, the fears that have been expressed by leading childcare charities, such as the National Day Nurseries Association, the Pre-School Learning Alliance, and others, and which I certainly share, are that the legislation as drafted may not be anything like robust enough in a number of areas to guarantee the survival of, and future prospects for, this vibrant mixed economy in childcare.
	An example quoted is that of children's centres. There is clearly merit in the notion of integrating children and family services through Sure Start centres, but it is worrying that a proportion of local authorities seem to do nothing to involve existing daycare providers in developing children's centres. The experience of day nurseries offers an insight into some of the problems. In some cases, these centres are emerging either adjacent or very close to an established day nursery, but they are not involving that day nursery in the children's centre being set up. This is particularly worrying since Ofsted had rated 99 per cent of day nurseries as either good or satisfactory. As the noble Baroness, Lady Morris of Bolton, and other noble Lords have said, in some instances day nursery occupancy levels have dropped below a sustainable level. If this situation persists, not only shall we lose that investment in quality childcare providers, but parents will no longer enjoy that wide range of choice that is so important.
	One must hope that the Bill will curb this trend, but how can we be sure that by then the level of duplication will not have forced many private and voluntary providers to pack up shop? That would certainly not help to enhance the volume and diversity of childcare. I acknowledge that the Minister's department has published guidance advising local authorities on how to team up with the private and voluntary sector but, so far as I am aware, these recommendations are not mandatory. How many local authorities are listening and should not far more be doing so?
	I have taken rather a lot of time over the concerns of PVIs because of the very special history of childcare development in the UK. I really hope that the Government will be prepared to think of far more convincing ways to reassure that sector that it will be an equal and valued partner in this vital area.
	The quality of what is being provided and the right balance to be achieved in the early years foundation stage have been mentioned, and I very much support what has been said. There will clearly be many opportunities to look at these in detail in Committee. But I want to touch briefly on other concerns. The Bill places special emphasis on assisting parents in work or training who are eligible for the working tax credit— as well as parents of disabled children. Both of those things are good, but we must not forget those other families on low income who are not eligible for the WTC. Only 337,000 families benefit from the childcare element in the WTC. Families that are eligible for working tax credit are not necessarily the poorest families. The Bill does not take into account parents who do not work at all because they cannot afford both to work and to pay for childcare. So those families will still be stuck in a cycle of deprivation, something which we must address. Perhaps the Minister will give this point some attention when he replies.
	Last but not least, as other noble Lords have stressed, there is the question of funding for the considerable role local authorities are being asked to play. This is a good Bill, which I warmly welcome, but I hope the Minister can reassure the House that local authorities really will be provided with the necessary funds to achieve the objectives that we all share.

The Earl of Listowel: My Lords, it is a great privilege to follow my noble friend Lady Howe. I second what she and other Peers have said about the opening and closures of provision and how this will impact on the parents, the staff and particularly on the children. It is clear in the research that having a number of different placements for a child tends to be disruptive for them, so it is also detrimental from their point of view. I also strongly support what my noble friend Lady Howarth said about the need for expertise in local authorities and careful commissioning, and how one will ensure adequate expertise at a senior level in local authorities so that those making decisions about childcare recognise that good quality childcare may be costly, but is a necessity. I would be grateful for some response from the Minister to that question.
	My noble friend Lord Northbourne is sadly unable to attend this Second Reading. He has two longstanding prior commitments this afternoon. As your Lordships will be aware, there was somewhat shorter notice for this Second Reading than is customary. I will mention a concern of his that he would like to bring up in Committee with regard to kinship care. This Bill could do much to enhance the quality and availability of professional childcare, but does little to support the largest and most popular source of childcare in the country, which is kinship care—that is to say, care by grandparents or other members of the child's family. Kinship carers also need support. Any significant reduction in the current level of kinship care would place an impossible strain on the human resources likely to be available to provide quality professional care.
	Kinship care is the first choice of most parents and part of the culture and tradition of many of our ethnic minority populations. There is a strong case for doing more to encourage and support kinship carers, especially those who are prepared to undertake any training that may be necessary to support their practical experience and to ensure the quality of the care they give. I know the Minister referred to kinship care in his opening remarks, and other Peers have referred to it as well. I also thank the Minister for the clarity of his presentation of the Bill. I note in particular what he said about the education of young looked-after children, and I look forward to hearing more on that in later stages of the Bill.
	I applaud the Government's intention to reduce the number of children living in poverty, provide them with opportunities to associate with other children and benefit from that association early on prior to school, and enable more parents to enter work. I thank the Minister for the letter he kindly wrote to me recently about the issue in the Work and Families Bill on maternal leave. I warmly welcome the important step forward the Government are taking in increasing paid maternal leave to nine months, and then, at some time to come, to 12 months. That is a step in the right direction of permitting parents choice.
	I recognise the benefit of this Bill to the status of those who provide childcare. This is the first piece of legislation in their area, and we all recognise the low status they often feel they have. It should enable more parents to enjoy the satisfaction if they choose to work, and the sense of well-being they experience needs to be considered in the light of the isolation they can feel at home bringing up a young child.
	I cannot wholeheartedly welcome this Bill, however, particularly the crux of it—the duty of local authorities to provide sufficient access for parents to childcare. This will inevitably increase the supply of childcare. I am sure that your Lordships are aware that capacity in this area is of a low level. The good-quality childcare which the noble Baroness, Lady Walmsley, emphasised, and which is essential for providing the outcomes that are described in the EPPE research to which the Minister referred, is not widely available. If we press on the accelerator now, might that not depress still further the quality of childcare currently provided? That is very much my concern.
	Perhaps the Minister will say that improvements in inspection will help to allay my concern, but I understand that inspections take place about once every three years—perhaps I might check that with him—and that they last for perhaps for a morning. They may be brief and not so helpful an indicator; nor will they assist the setting to improve. The quality assurance programmes may be better. They take more time to interview the staff and observe practice, and take a portfolio from the staff of the work that goes on in the setting. However, the one programme of which I am aware takes place only once every three years. That a review of a new portfolio is sent through once every year is welcome, but that is still not enough. That does not give me the confidence that a sufficient lever exists to improve quality.
	The Government are hoping to introduce a great many more teachers or pedagogues—people with high professional qualifications—into these settings. I can see considerable benefit in that policy, and it is already working in some settings. However, I recall the report of the noble Lord, Lord Warner, Choosing with Care, from 1992. It looked at the selection of staff in children's homes and strongly recommended that consultants should work with those staff to push up the quality. I heard about three years ago that that recommendation largely failed to take because the poorly paid and trained staff in children's homes would often feel some resentment at an outsider coming in and telling them what to do.
	I know from my own experience that this can be an issue. I recall working in a hostel some time ago and saying to one of the members of staff that a table in the dining room which had been wobbling for three months—there were only two tables there—really needed to be replaced. She replaced the table promptly, but we did not speak after that. Working in a hostel is a difficult job in a difficult environment. A few weeks later, the manager said that two of her staff had gone home in tears because of the pressure and the environment. One has to be modest about what one thinks one can achieve in terms of improving quality. People who do not have training and education behind them, are poorly paid and have low status are not very amenable to being told how to improve their practice. It is a good deal more difficult to do than one might imagine.
	Why is quality of care lacking? First, there is a chronic shortage of supervisors for this work. Secondly, as I have said, the pay is poor. Thirdly, the transformation fund, while welcome, is but a small sum given the challenge. Rates of staff turnover are in the region of 30 to 40 per cent—perhaps the Minister will provide me with a more accurate figure in his response. All the time, new and unqualified staff are coming into settings, which is disastrous for the relationships between staff and children. The providers of care to whom I have spoken recognise the staff problem. Academics emphasise that it will be several years before we can rely on good quality in this area.
	I have observed practice in nursery settings; for example, in a nursery in a difficult area of north London. The Government are seeking to benefit the most disadvantaged children. I applaud their desire to do this and to take them out of poverty, but if the provision in these settings is of a poor quality, the children who will be most harmed are those who are most vulnerable. I was observing a group of three or four year-olds with one childcare assistant in the nursery concerned. Three boys were playing at putting a steel ball into a tower and letting it fall. One of them kept on stealing the turn of the others. The childcare assistant was not intervening and looking very much overwhelmed. Another member of staff told me that the mother of one of the children in the nursery was a heroin addict. The staff member said that something more should be done for the child, but that the mother was clever enough not to reach the extreme point where the child would be removed from her. It is such difficult work and it is so poorly supported.
	I welcome so much of what the Government have done in the Birth to Three Matters guidance, which, as other Peers have said, is very welcome. A recent edition of Nursery World refers to it emphasising the following:
	"'A relationship with a key person at home and in the setting is essential to young children's well-being' and 'Caring adults count more than resources and equipment'".
	That is absolutely right. I welcome that. The article continues:
	"Young children never show that they feel 'too attached'; I hear this worrying phrase sometimes from practitioners or team leaders. Many babies and under-threes now spend many hours in out-of-home care. For their emotional health, they must be allowed to become close to their non-family carers. If very young children are blocked from developing a bond of affection, then they will remain ill at ease and fail to benefit from the play experiences and resources on offer, however well organised".
	I thank the noble Baroness, Lady Morris, for her reference to my interest in this area. I cannot emphasise enough how crucial it is that the sound emotional bond between carer and child is established at an early stage. All the things that we want to see later on stem from that sound start.
	I do not wish to take too much of your Lordships' time. I am sorry to be so slow this afternoon. Why is it so important that social workers are well trained and well supervised? It is important to support them in this difficult work but it is also crucial that, when people intervene in families' lives and have so much power to do harm and to do good, they have the capacity to do so. It is extremely alluring for those who are involved with families to go beyond their power and to do more harm than good. The noble Lord, Lord Hurd, is present. I give the example of a statesman in a first-world country looking at the developing world. He must think carefully about his true capacity before he becomes involved in a chaotic, developing-world country and about the consequences of imprudent interventions.
	I respect the ambitions of the Government and remember the low point from which we started. When Margaret Hodge was the Children's Minister, she emphasised that we were 20 years behind our neighbours in this area. If consistent exposure to poor quality of childcare—even if it makes a child's experience less good than it was previously—spread through 100,000 children, it could make a significant difference. I ask the Minister to pause for thought. If he can provide any information that might reassure me, or any information on the progress of the Children's Workforce Development Council, that would be welcome. Perhaps some of its early recommendations could be added to the Bill.
	The success of every child in this country is more vital now than it has ever been, with the current birth rate and an ageing population. I absolutely laud the Government's intentions. However, I beg your Lordships to take full account of the workforce issues. I leave those thoughts with the Minister. I also apologise for speaking at such length.

Baroness Massey of Darwen: My Lords, this is a welcome Bill which complements the 10-year strategy for childcare, the Children Act and other strategies put forward for children. It again reflects the Government's emphasis on the welfare of children. The duties on local authorities also extend the existing children's information service as outlined in the schools White Paper Higher Standards, Better Schools for All.
	The All-Party Group on Children—I declare an interest as its chair—has held two meetings on the Bill, one with the Minister with responsibility for children, Beverley Hughes, at which many noble Lords present today were also present. I shall put forward some of the issues raised by those meetings. I am grateful to numerous groups that have sent briefings on the Bill, including the Early Years Forum, Mencap, the LGA, the Pre-school Learning Alliance, the National Day Nurseries Association, Working Families and the Tree House. My comments, like some of the comments of other noble Lords, will touch on many of the issues that they have raised. However, I shall draw in particular on the child impact assessment on the Bill carried out by the National Children's Bureau and the Children's Rights Alliance, funded by the Nuffield Foundation. I want also to raise an issue of my own, which is how grandparents and their status fit into all of that.
	In the All-Party Group on Children meeting with Beverley Hughes, she emphasised that the Bill would be the legislative basis for the childcare strategy and Every Child Matters programme. As the Minister has said today, it will be part of the drive to transform the life chances of those who are disadvantaged. Research shows time and again that lack of material, emotional and intellectual support and stimulus for children in the early years can lead to serious disadvantage and lack of aspiration in later years. It is therefore vitally important to strive to get early years provision right. That is what we are trying to do.
	In that meeting with the Minister for Children, some of the issues raised were about provision for disabled children, sustainability and affordability for parents, workforce training, childcare for working parents, the implications of the early years foundation stage and the relationship between the private and voluntary sectors. Many of those issues have already been raised by other noble Lords. I shall therefore turn to the concerns expressed in the child impact assessment. I should say first that the process of child impact assessment involves the analysis of proposed legislation to determine its likely effect on children and young people. The UN Convention on the Rights of the Child underlines its considerations. I shall address four issues which are brought up by the child impact assessment on this Bill: involving the child, working and non-working parents, registration disqualification, and the early years foundation stage.
	The first is the contribution of children to society, one of the outcomes of Every Child Matters which has already been referred to by the noble Baroness, Lady Walmsley. In the Bill at the moment, children are absent from the list of those to be consulted by local authorities under Clause 3, on how the co-ordination of services in a particular area happens. Under Clause 11, local authorities have a duty to undertake a "childcare assessment" of the sufficiency of childcare in their local area and must consult with groups of persons prescribed. Again, that does not include the voice of the child.
	I turn next to working parents. Clause 6 places a duty on local authorities to secure sufficient childcare for working parents. This clause may be detrimental to children in households where parents choose to stay at home. Children benefit from interaction with other children, and parents may also benefit from a break from caring. Others have addressed the issue on disability, the noble Lord, Lord Rix, in particular. Suffice it to say on disability that the child impact assessment to which I referred earlier considers that the rights of disabled children may be infringed under certain articles of the UN Convention on the Rights of the Child.
	I have a query about registration and disqualification of those caring for children. The Secretary of State may provide exemptions from the requirement to register for early years childminders, early years providers, later years childminders for children under eight and other later years providers for children under eight. Article 3 of the United Nations Convention on the Rights of the Child says that states parties must ensure that the institutions, services and facilities responsible for the care and protection of children shall conform with the standards established by competent authorities, particularly in the area of safety, health, and the number and suitability of staff, as well as competent supervision. Crèches are already exempt from registration under the Bill. I feel there is a loophole here in that the Secretary of State's powers to exempt certain groups of childcarers could endanger the children involved.
	I turn now to my question on grandparents, a matter on which the noble Earl, Lord Listowel, touched. Where exactly do grandparents fit into childcare? Some grandparents, with great hardship, are caring for their grandchildren single-handedly—for example, if their own child is using drugs or in prison or dead. That is not informal care; it is a job. These grandparents have a very indistinct profile and little financial help although they save the state a great deal of money. What is their status?
	I move now to the early years foundation stage, again referred to by others. Clauses 39 to 48 bring together the current Birth to Three Matters framework, the curriculum guidance for the foundation stage and the national day care and childminding standards for under-eights. Article 29 of the United Nations Convention on the Rights of the Child states that the aim of education is to develop the child's personality, talents and mental and physical abilities to their fullest potential. I welcome that emphasis. A child who has been brought up in a stimulating environment has enormous advantages in later years. Structure is essential for this, in whatever setting. It has been known for children to be left sitting or lying down with no stimulus or left to run around in a chaotic fashion. Children need a variety of learning through play such as art, books, water play, clay and physical challenge. Those activities should be offered to children as part of all good early years provision, and children learn thereby about choice. I am avoiding the word "taught", as I think the noble Baroness, Lady Morris, would, as it may encourage the idea of too much formality too soon. Children should be offered a choice of structured play from which they learn, and information is needed on this provision. I am aware that this was discussed on Report in another place but I am still unclear about the detail of what and how.
	The Early Childhood Forum welcomes the Bill as the first piece of government legislation to focus solely on very young children and on childcare. Its concerns are reflected in some of my previous comments and in the comments of others, but in particular the forum points out that a continuous quality improvement mechanism should be provided. Workforce development, the introduction of the early years foundation stage and new regulations and inspections must be supported by such a continuous quality improvement mechanism, and developments should be linked together to achieve high-quality services for children. How will that be guaranteed?
	All of this Bill interests me. I have had time to focus on only a few areas that I think can be further refined. I look forward to the Minister's response and to our deliberation on the Bill in this House.

Baroness Sharp of Guildford: My Lords, we now begin the process of winding up this debate, which has been an interesting and good one. Its spirit was captured by the noble Baroness, Lady Howarth, when she said that we welcome the aspirations of this Bill: to make accessible, affordable and flexible childcare available for every child and parent who wants it.
	This is one of two related Bills currently before your Lordships' House. The Work and Families Bill is concerned with making it easier for parents to take time off from work and spend it with their families. Meanwhile, this Bill is primarily concerned with providing that accessible, affordable and flexible childcare in terms of both its educative quality and, in a substantial underlying theme, enabling parents to go back to work. It is part of the child poverty campaign because those who can go back to work tend to have better incomes. It also provides respite care—not least, for the disabled. We shall pick up on that later.
	The Government's proposals, under their Choice for Parents, The Best Start for Children: A ten year strategy, are ambitious indeed. The Minister referred to some of them in opening this debate, but it is worth pondering on this; for the 2.9 million children under five in this country, we currently have 600 Sure Start centres. The aim is that by 2008, or in two years, we shall have 2,500 and that by 2010 we shall have 3,500. In addition, the Government are committed to providing free pre-school education for three to four year-olds—or the early years foundation stage, if you prefer, for three to five year-olds—on a part-time basis. That is currently for 12 and a half hours for the 38 weeks of school terms; but next year, in 2007, that is to increase to 15 hours a week, with the long-term aim of being able to provide 20 hours a week for three to five year-olds whose parents want to participate in it.
	It is thus an extremely ambitious strategy with which many of us concur, while having some reservations about it. Those reservations have come very much to the fore during this debate. Above all, perhaps, there is that reservation which the noble Earl, Lord Listowel, picked up: that we are trying to run before we can walk, and perhaps concentrating too much on quantity and not enough on quality.
	We started from a very low base among European countries in 1997. Then, we had possibly the lowest provision of childcare and are now trying to reach the Scandinavian levels—a splendid ambition, yet there are, as I say, reservations. They involve first and foremost, what has emerged from this debate as regards resources. It is really rather extraordinary to note in the Bill the provisions on what local authorities are required to provide, and yet to read in its Explanatory Notes that,
	"The proposed duties on local authorities in England will be financed within the resources which have already been made available to them for childcare and early childhood services".
	We know that the Sure Start budget is due to grow to £1.7 billion by 2008, when we are to have 2,500 such centres. That is a considerable amount of money, although perhaps not just for Sure Start. The Explanatory Notes suggest that by 2007–08 there will be funding of something like £1.7 billion for Sure Start and similar educational programmes. We should however bear in mind those 2.9 million children; £1.7 billion is only slightly over £500 per child, so it has to go a long way.
	One key issue here is clearly that of staffing and staff training. My noble friend Lady Walmsley noted the transformation fund and the funding allocated to it for training staff. Currently, many have a level 1 nursery nurse qualification; they need to move upwards to something well above that. We still have a long way to go to reach the Danish requirement of being a graduate to be involved in childcare. Here, we are looking at rather less than £500 per person for training over the next three years. So, it is an ambitious programme and I do not know that we will be able to fulfil it with those resources. Perhaps the Minister can give us some reassurances on that issue.
	Second among the issues that have come up in our discussion is the question: who benefits? Clause 6 puts the duty firmly on the local authority,
	"to secure sufficient childcare for working parents".
	That picks up on the Government's commitment and priority of ensuring that childcare is available to parents so that if they wish to work they can. Yet there has been, throughout our debate, a feeling that it needs to be available to those parents who are not working for one reason or another. We have talked at considerable length about those parents with children who have disabilities—84 per cent of whom are at home because the burden of childcare is so huge.
	There are parents who choose to stay at home to look after their children. We all have sympathy with that, knowing that the bonding between mother and child is extremely important, particularly in early years. In addition, we should recognise that the poorest parents are often those who are not in work but on benefit. Given that the Government have also put on local authorities the duty to "reduce inequalities"—it is bang in front of us, in Clause 1—it seems slightly strange that we have to provide a sufficiency of childcare facilities for working parents yet, if we are to reduce the inequalities, it is often the parents who are not in work who need that help. The right reverend Prelate the Bishop of Chelmsford raised that point. What we really need to see, in assessing childcare needs, is that local authorities must take account not just of parents who are working or studying but also those who are not in work.
	A third issue that pervaded our discussions was that of quality as well as quantity. Within the Bill, quality assurance comes in Part 3 via regulation, registration and inspection. The clear message is: quality is important. Yet there is considerable variation in quality. That, again, was brought up by the noble Baroness, Lady Howarth, who talked of variations between the quality of different local authorities' provision and how some adhered to current regulations on recommended practice, yet some did not adhere at all. The noble Baroness said how necessary it was to have a commissioning framework, so that we can lay down the standards required of local authorities. Here again the problem comes back to the quality of the workforce. There seems to be a gap in linkage between the workforce strategy and the 10-year strategy. I do not understand why the Government have withdrawn from the Investors in Children programme, for example. It is vital that continuous professional workforce development is written into the programme, not one-off training. There is an enormous backlog that needs to be thought about and addressed.
	The fourth issue that has cropped up, mentioned by the noble Baroness, Lady Massey, is the voice of the child. The Bill puts emphasis on the five outcomes within the context of the Children Act. I remember that during our debates on that Act we talked at considerable length about those outcomes being the result of a lengthy survey of what children wanted. Yet, in developing this strategy, the voice of the child seems strangely absent. In Clause 3, for example, a duty is placed on the local authority to secure an integrated strategy and to involve in its development,
	"parents and prospective parents . . . early years providers . . . and . . . other persons engaged in activities which may improve the well-being of children in their area".
	But there is no mention of the children themselves.
	Again, in Clause 11, local authorities are to undertake,
	"assessments of the sufficiency of the provision of childcare".
	Clause 11(6) states that local authorities must,
	"consult such persons . . . as may be prescribed".
	But local authorities must take account of the views and experiences of young children. One of the features of the Children Act, in relation to that survey, was that it showed that even young children of three, four and five years old had views that were worth taking into account. They may express them in different ways, but they had voices which should be heard. That is even more important in this provision for extended schooling for five to eight year-olds. Please let the voice of the child be recognised in the Bill.
	The fifth issue that many noble Lords have mentioned is in the final part of the Bill regarding learning and development. Most people welcome the integration of provision for the 0 to 5 year-olds and the foundation stage at school. It makes a lot of sense to look at the development of that learning process. But how much should they be taught? There is an awful phrase in Clause 41(2)(b), which refers to,
	"the matters, skills and processes which are required to be taught to young children".
	They learn through play, and we shall be bringing forward amendments to that, which will have much support in the House.
	My noble friend Lady Walmsley and the noble Baroness, Lady Morris, mentioned the need for inspectors in this sector to be aware of what is required. Both of the stories that we heard about inspectors in the foundation stages did not reflect well on those inspectors. It is vital that such people recognise the need to ask: what are the ambitions at those stages and what do we want to do?
	Finally, there is the question of regulations. This Bill, like so many that we consider these days, leaves much to regulations that will be laid down by the Government—not least in relation to the final clauses, Clauses 99 to 101, which were added to the Bill only on Report in the other place. They require local authorities to provide detailed information about the range of provision in their areas. But because the regulations have not been published, it is unclear precisely what data will be required, who will collect them, who will store them and who will use them. Can the Minister say whether we are likely to see any of those regulations before we complete our consideration of the Bill? How far will the regulations regarding information relate to last night's debate on the information sharing index? Every child will have a unique number and be listed under that by its name, age, sex, parents, address and so on. There will be much overlap in the information that will have to be collected.
	In conclusion, there is much in the Bill and in the Government's ambitions that we on these Benches support. The issues that have been raised in this debate are to some extent niggles, but reflect bigger issues of principle and we shall debate them. On the whole, we share the Government's view on the need for comprehensive and integrated provision and, in some sense, we congratulate them on the degree to which they have begun to roll out such provision. But there are caveats. Quality is important; listening to children and young people is important. Whereas the Bill sums up the term "nanny state", it is also important that its provisions are not too "top down" and are a little more "bottom up".

Baroness Seccombe: My Lords, as I expected of a debate on this subject, it has been erudite, passionate and well informed. I, too, thank the Minister for his clear and heartfelt introduction. As my noble friend Lady Morris has already explained, we broadly welcome and support the aims of the Bill, which has been described as,
	"the most important early years development in recent years" .
	We on these Benches recognise the important role that childcare plays in Britain's future, as indeed do all your Lordships who have taken the time to speak today. We have continually supported the principle set out in the Green Paper Every Child Matters, reiterated in the 10-year children's strategy, that we want to give,
	"every child the best start in life".
	Indeed it is with that aim in mind that we have concerns following the Bill's progress in another place.
	We have witnessed increasing costs of childcare in this country with concern. A recent Daycare Trust survey stated that the cost of a typical full-time nursery place has outstripped inflation by nearly 20 per cent in the past five years. This makes our nursery care among the most costly in Europe. Earlier this month the Government disappointingly missed their first target to end child poverty by some 300,000 children. At the same time, the predicament of the modern family is often particularly difficult, as was highlighted by my noble friend in her speech. Many of the details have already been raised in discussions on the Children and Adoption Bill and the Work and Families Bill.
	Sure Start, which has made a difference for many parents in focusing on 20 per cent of the most deprived wards, has a problem, as the Government's own figures show; but as my noble friend pointed out, 46 per cent of the most deprived children do not live in those wards. It is no surprise, although disappointing, that eight out of 10 parents say they are under strain—although I have to say that when my children were small I could have said the same. It is clear that while the will is there, there is still much to be done in the complex situation surrounding the nurture and well-being of children and their families today.
	It is vital that we provide more people with the chance and choice to access affordable quality childcare. Childcare plays just as important a role for families where parents are non-working as well as for those who are—particularly where disability is an issue. It enables young children to meet other children, make friends, and so socially to develop—as well as providing parents with the much-needed breathing that is essential for their own well-being, and often providing much-needed finance for the family coffers.
	Happy parents help to produce happy children, and we should not forget that stability and continuity of care are most important for both parents and children—as the noble Earl, Lord Listowel, pointed out. We are concerned that in some areas new government funded places could adversely affect private providers. We want to see a mixed economy in childcare where the Government proposals work with the private and voluntary sector, not against it. Childcare needs to be sustainable and flexible.
	As my noble friend Lady Morris has already said, quality needs to be central to the Bill, and we must improve the results for those who need and deserve our support. In the other place, the Government set great store by phrases about reducing inequalities. That is why providers of childcare must be well trained, using a universal accredited system. As the noble Baroness, Lady Walmsley, and other noble Lords have said, it is clear that your Lordships share the Early Childhood Forum's concerns surrounding the quality, suitability and reliability of care for vulnerable children's groups such as travellers, refugees, asylum seekers, looked-after children and the disabled.
	The noble Lord, Lord Rix, highlighted the challenges, as well as the joys, that caring for a disabled child can bring. Families of disabled children are often among the poorest and face the greatest costs—on average three times as much as raising a non-disabled child. We will be looking at these issues in detail in Committee, including the age range to which childcare is provided for children with mental disabilities, an issue of concern to Mencap.
	My noble friend Lady Morris and the noble Baroness, Lady Massey, both stressed that one of the most important parts of the Bill concerns that little word "taught". We broadly welcome the early years foundation stage. However, as many of your Lordships have pointed out, young children learn so much more when they are supported in playing and exploring the world around them—as the noble Baroness, Lady Walmsley, said. Indeed, each child's development is different and can depend on the degree of bonding and affection that they have in the first years of life. This is a principle that we will discuss in detail in Committee.
	I am sure the Minister is aware of the concerns that the Government's approach could lead to what has been termed "schoolification". It is clear that the success of this Bill will rely enormously on how local authorities embrace, interpret and enact its provisions which, as many of your Lordships have pointed out, bring no additional resources with them; a serious matter that will need to be addressed. There are concerns regarding targets that the local government authorities may have to meet the need for cross-border co-ordination and information on specialised services as well as how the public/private partnerships will work from the outset to create flexible, working childcare services. We will be seeking clarification on the issues of regulation, registration and inspection when we discuss Part 3 of the Bill, especially regarding exemptions.
	The success of the Bill will depend also on the success of action across various government departments and their legislation. I have already mentioned three other Bills that impact on children. The Minister has pointed out that we are due to start deliberations on the safeguarding of vulnerable groups on 28 March, next week. The role this House plays in this respect is one we do well. We on these Benches welcome measures to protect our children, particularly vulnerable children, although, as my noble friend said, there is a fine balance between protection and stifling normal life. We will wish to look at the details of the new clauses introduced by the Government during the last stage in another place. Much of the detail has been left to regulation and the National Children's Bureau is among those who have expressed concerns over how the Her Majesty's Government will measure well-being and equality.
	It is important to place the issues raised within the context of broad support for the aims behind this Bill. But as always the devil is in the detail, and it is our job to ensure that this legislation will work when put into practice and will improve the quality of life for children in those crucial early years; I would like to thank all the organisations which have sent us such excellent briefing.
	We look forward to working with the Minister to improve the Bill, so enabling our children to have the very best possible start in life, a wish obviously very dear to everyone who has spoken.

Lord Adonis: My Lords, we have had an excellent debate. Indeed, it has never been my lot since becoming a Minister in this House to participate in a debate where the Government have been so warmly supported from all sides. Something must be going wrong and I shall suddenly wake up from the dream and find myself in the middle of the Daily Mail. No doubt in that unfortunate eventuality, the support of the right reverend Prelate the Bishop of Chelmsford, whose excitement—the word he used—at the prospect of the Bill may save me from some of the worst consequences.
	I was particularly grateful for the historical perspective of the noble Baroness, Lady Howe, who proved the adage that there is no such thing as a new idea in this world. Of course the concept of substantial and near-universal childcare is one that dates back to the Second World War. I am glad to tell your Lordships that it has not taken such a drastic turn of events to produce the extension that took place in the 1940s. There were other, worthwhile features of social organisation, including identity cards, which the Government are also seeking a return to and which, on that same question, may garner more widespread support in your Lordships' House.
	I have noticed that the noble Baroness, Lady Morris, who I am getting to know well during our debates on matters to do with children, where we share a substantial interest, is good at creating an air of great dissention, when in fact there is agreement on the underlying principles. Although we are largely at one on these issues, she did her best to try and create an air of great dissention by proclaiming the importance of ensuring that nothing in the Bill would force parents to choose particular types of care that were not appropriate to their own circumstances. She said that we should value the role of the voluntary and private sector and mentioned a whole set of similar propositions with which I wholly agree. I should stress to your Lordships that there is nothing in this Bill which will oblige any parent to choose any particular type of childcare that is not appropriate. Indeed we praise—

Baroness Morris of Bolton: My Lords, I hope that the Minister does not mind giving way. Parents can choose only if that provision is available and it cannot be available if it is driven out of the market. That was the point I was making.

Lord Adonis: My Lords, the noble Baroness is quite right, but the number of childcare places has doubled since 1997 and the vast majority of those places are in the private and voluntary sectors. It is simply not the case that there has been some nationalisation of childcare in the way that has been suggested. We are at one on this; we want to see a thriving market in childcare in which the private and voluntary sectors play a substantial role. They do so and I pay tribute to the role of the Churches and the faith communities in this area too. They all play an important role. We see local authorities as having a duty to secure provision, but the noble Baroness, Lady Walmsley, was not too enamoured of that. She did not like the idea that the role of local authorities might have too light a touch. These provisions exist precisely to ensure that the private and voluntary sectors are empowered.
	I came under great criticism from—I like to call her my noble friend—the noble Baroness, Lady Howarth, for proclaiming the importance of schools in this respect. I am unashamed in proclaiming the importance of schools; we undervalue the role that schools can play in our society. It is precisely because we want schools to regard engagement with parents—including the provision of childcare—as an important part of their functions, to see that they better engage with parents, that we have included the provisions in Clause 8(4). These ensure that the provision of childcare,
	"by the governing body of a maintained school",
	is not covered by the provisions of the preceding subsection which leave the local authority as a provider where there is not a sufficient market for it.
	The noble Baroness, Lady Walmsley, who I know is not enamoured of our trust schools, or academies, or independently managed schools, is deeply worried that schools might go too far, and become too enthusiastic in providing childcare for their parents. I think the phrase "loss leading" came into her remarks. I tried to get my mind around this concept of loss leading. To my mind, we should support anything a school does which promotes the active engagement of its parents in something as worth while for them as providing appropriate childcare. I am looking forward to debating this matter in Committee, but at the moment I cannot envisage the circumstances in which the state would be in the business of seeking to ban schools—that is what it would come down to—from providing legitimate childcare. I think that we will be conducting a friendly debate on this issue.
	I shall put my starting proposition on the table: I think it is thoroughly good and worth while for state schools to provide childcare which ensures that the needs of parents are met. Many of the parents who will take most advantage of this are precisely the non-working and poor parents whom we have been talking about. I look forward to discussions about local market distortions in that, although I do not think that such distortions would affect parents. We are talking about childcare that is convenient to parents and which parents wish to use. In my experience as a parent, there is nothing more convenient than childcare being provided at a school which, in all likelihood, is attended by other children in the family. In that way, parents can build their childcare arrangements around the wider education provision that they make for their children.
	I can see that in Committee we shall have huge debates, which I shall not address now, on the word "taught". I remember once listening to a sermon in which not a bishop but a more lowly cleric said, "When I use the word 'man', I embrace all women". When we use the word "taught", we embrace everything that has been described as play, social interaction and child development. I know that long extracts from the Oxford English Dictionary have been read out in another place. I am sure that we will revisit them in your Lordships' House, together with many other interpretations of the word "taught", but I do not think that we are far apart on this issue. However, I wholeheartedly withdraw the word "manpower". Before the amendments appear in the Marshalled List, I withdraw that word entirely. I replace it with the word "workforce" with immediate effect so that we do not have to go in that direction.
	I shall seek to meet as many as possible of the specific points raised. The noble Baroness, Lady Morris, was concerned that at the moment Sure Start is focused on the most deprived areas. As she rightly said, there are very many poor parents and needy children in areas that do not fall within the most deprived wards in the country. I think that the noble Baroness will accept that we were right to start in those areas, because there were no, or very few, children's centres before we began the programme of establishing them.
	Until this year, children's centres have indeed been established where the need has been greatest, with local authorities focusing on children living in wards that are among the most disadvantaged. However, from this year onwards, we will be focusing more on developing children's centres beyond the less advantaged areas. The noble Baroness, Lady Sharp, rightly said that the establishment of 3,500 such centres is an ambitious objective—and it is—but, to give some idea of relative scale, we have 20,000 primary schools in this country. If we are to move anywhere close to the situation that exists in some European countries that have better provision in this area, I believe that in due course we will need to go substantially beyond the figure of 3,500, as we will wish to see children's centres in every community where there is parental demand for them.
	A moment or two ago, I touched on the subject of market diversity and private and voluntary providers. We see the role of the voluntary and private sectors as being immensely important. The provisions of the Bill underpin that importance. Under Clause 3(4), local authorities are under a duty to encourage the involvement of private and voluntary sector providers of early education and childcare in the planning and delivery of integrated early childhood services aimed at improving outcomes for under-fives. Under the childcare duty in Clause 8(3), to which I referred a moment ago in the context of schools, local authorities can provide childcare themselves only if no other provider is willing to do so. We put in the subsequent provision because we wish to preserve the position of schools.
	The role of the private and voluntary sectors, which includes social enterprise organisations of the kind that the noble Baroness is engaged in, is of great importance. A recent survey shows that 58 per cent of childcare in children's centres—that is, in the new forms of provision that we have been putting in place—is provided by the private and voluntary sectors. But we agree that we must continue to ensure that there is a diverse mix of provision under the Bill. We are amending the Sure Start grant memorandum so that from April this year there will be a requirement for local authorities to consult, and consider using, the private and voluntary sectors as they develop children's centres. I hope that that will further underpin our commitment in this area.
	That ties in directly to the withdrawal of childcare places, about which much was made, but I stress that this is in the context of a doubling in the overall number of childcare places since 1997. In any rapidly expanding and competitive market of the kind that we have seen in childcare, one would expect to see some closures. I am not myself in the state socialist mould of provision that says that we should guarantee all existing provision and not allow the market to operate. There is an important role for the market in responding to parental demand.
	Closure rates have stayed lower than at any time since June 2003. Since March last year, both total closures and the closure rates of childcare places have fallen in each quarter. The closure rate fell from 17 per cent in March last year to 12.8 per cent in December last year—a decrease of one quarter. Comparing December 2004 with December 2005, closure rates fell by more than 3.6 per cent. The total number of closures in the year to December 2005 was 158,343—down from 200,770 in March 2005. So we are seeing a substantial reduction in both the closure rates and the number of closures, and all those figures are from Ofsted.
	The growth that we have seen has been predominantly in full daycare provision, where the number of places has increased from 284,000 to 553,000, of which 83 per cent are in the private or voluntary sectors. So the state is not crowding out the private and voluntary sectors; on the contrary, the private and voluntary sectors are the dominant players in the provision of childcare, and that is as we would wish to see it.
	The noble Baroness, Lady Morris, and many other noble Lords asked what assessment would be made of the needs of non-working parents, who have a vital set of needs that we must recognise. I stress that the needs of non-working parents will be assessed in exactly the same way as those of working parents. The local authority will have to take account of the needs of non-working parents in securing sufficient provision for working parents in the area. As the House will know, the Government already provide 12.5 hours a week of free early years provision for all three and four year-olds, irrespective of the employment status of their parents. That will rise to 15 hours a week by 2010, with the aim of it increasing to 20 hours a week in the long term. We are very mindful of the needs of non-working parents as well as those of working parents.
	Virtually every speaker in the debate raised the issue of resources. The noble Baroness, Lady Seccombe, said that there would be no additional resources, but that is not the case. Substantial additional resources will be going into the system over the next few years, and the noble Baroness, Lady Sharp, gave the figures. We said in the Explanatory Notes that the resources available would be those that had been announced. Alas, there was not, and never is, a pot of gold that we can magic up outside the resources that have already been announced within the Comprehensive Spending Review. But the additional resources that have already been announced are indeed substantial. Between 2004–05 and 2007–08, total expenditure in this area will increase from £958 million to £1.8 billion—a 55 per cent increase—and a total of £4.4 billion will be available in 2007–08, when the funding for the free early education offer is taken into account.
	In addition, there is the extension of the 12.5 hours a week of free provision for three and four year-olds from 33 to 38 weeks across all settings, which takes place from this April. That will cost an extra £82 million, which my department is making available through the dedicated schools grants, so local authorities will be reimbursed for that. In addition to the global total for under-fives and the funding for the additional weeks of free places, there is also the £2 million a day childcare element of the working tax credit which now flows through the system directly to parents. That makes childcare more affordable for the least well-off and, of course, does a great deal to stimulate demand and choice.
	Last year we had already increased tax credit levels and we plan to increase them again this year, so that the maximum proportion of childcare costs that can be claimed back will rise from 70 per cent to 80 per cent, so meeting the concerns of the noble Earl, Lord Listowel, about affordable childcare. We are putting a very significant additional resource into the system so that childcare is affordable and so that there is provision at local authority level to develop children's centres and to make the other childcare placements to which we have referred.
	In addition to all that, under the Bill, where they are providers of childcare themselves, local authorities will also be able to recover costs by charging. We think that is an entirely proper activity, not least so that there are not the distortions of the kind that would occur if local authorities were seeking to subsidise unduly. Some of the income that they generate from that charging will be available through the working tax credit.
	A whole set of issues was raised on registration, largely by the noble Baroness, Lady Walmsley. I shall try to run through as many as I can. She raised the issue of fees for registration and inspection. She is quite right to say that they will increase by about 30 per cent. We are talking about fees for child minders rising to £14 and £18 to register; and fees for daycare providers rising to £150 to register, as against the ongoing cost of £120 thereafter. Those are still massively subsidised costs. I should give a comparison of the actual costs at the moment. Currently, daycare providers pay £121 to register with Ofsted. At present, the registration actually costs approximately £1,500 to Ofsted to carry out. They then pay £94 annually thereafter and the inspection costs thereafter to Ofsted are about £1,500. So the level of subsidy in the system at the moment is very great and it is similarly large in respect of child minders who currently pay £14 to register with Ofsted and the registration cost is approximately £750 to the state. Although we seek to recover more of the costs and strike a better balance between the interests of the providers and those of the taxpayers, there will still be a very substantial public subsidy.
	The noble Baroness, Lady Walmsley, the noble Earl, Lord Listowel, and my noble friend Lady Massey referred to the exemption of certain categories of providers from registration. I understand that concern and I am sure that we shall debate it more in Committee. Clause 96 defines "early years provision" as,
	"the provision of childcare for a young child".
	Early years providers, therefore, include anyone who cares for young children from schools to nurseries and from child minders to babysitters and nannies. That is a very wide spectrum and we believe that it is right that there should be a power to exempt. Otherwise we shall include everyone who provides any form of childcare and I do not believe that your Lordships would wish to have that degree of over-regulation and interference in private family life. I accept that we need to be clearer about how we exercise the power to exempt. I believe that the House would wish us to exercise that power; otherwise we would see a big invasion of private life.
	On quality improvement and ensuring that quality assurance schemes are not simply a once-in-three-years inspection—a point raised by the noble Earl, Lord Listowel—we agree that quality improvement schemes have an important complementary role to play. We are supporting the National Children's Bureau in establishing the feasibility for a sector-led benchmarking scheme for quality assurance schemes and I shall happily give the noble Earl more information on that point.
	The noble Baroness, Lady Walmsley, raised another regulatory issue about crèches. Crèches, of course, offer a different type of service compared with other types of provider, caring for children for short periods only or on an irregular basis. Again, we do not wish to over-regulate that kind of provision. However, it is the nature of the setting and not its name that will determine its regulation, so it will not be possible for people simply to claim to be running crèches and therefore to evade proper regulation.
	The noble Baroness also quite rightly referred to the importance of BME groups which need to be treated sensitively and that childcare should be available to meet their needs. We entirely agree with the noble Baroness about the refugee and traveller communities. Last week, I met the noble Lord, Lord Avebury, to discuss precisely those communities and the very big challenge of meeting their proper engagement in the school system. I entirely agree that the same issues apply in relation to under-fives provision. The noble Baroness mentioned existing provisions in the Race Relations (Amendment) Act 2000, which already provides the legislation required to ensure that racial discrimination is eliminated and that equality of opportunity and good relations are provided. Statutory guidance to support this Bill will reinforce those duties.
	The noble Baroness, Lady Sharp, said that there is a lot of guidance and regulation in the Bill—I accept that there is—and she asked whether we could make more detail available. We issued quite a number of policy papers in key areas covered by regulations in the other place. I shall make those available to noble Lords before we go into Committee. As we proceed through the Committee stage, we shall make more information available.
	I shall deal briefly with two final, important issues: first, the issue of listening to children and whether such a matter should be on the face of the Bill. We see the input of children and the views that they express as of immense importance in developing local children's services, including childcare and early education. I have given a great boost to the role of schools councils in relation to primary schools and the very important work that they can do to give children a voice. I believe that we can do more for the under-fives area too. I entirely agree with the noble Baroness, Lady Walmsley, when she said that four and five year-olds are quite capable of expressing views about the nature of provision and what is happening to them.
	The latest children's centre practice guidance states that local authorities,
	"must consult with parents and children about what is offered and how".
	It provides examples of how that should take place and the practice elements of the statutory guidance on outcomes will reinforce that. My right honourable friend the Minister for Children gave a commitment in another place that we will require local authorities, by means of regulations, to take account of the views of children. She said:
	"We agree that early childhood services will be effective only if they engage not only parents, but children who use them. I am committed to that, and so are the Government. That includes listening to the views of children under five years old who use the service".—[Official Report, Commons Standing Committee D, 8/12/05; col. 83.]
	In Committee, I shall be more than happy to consider whether we should take that further. Our commitment in this area is very strong indeed.
	The noble Baroness, Lady Walmsley, mentioned cautions and convictions which are difficult and complex in relation to young people and which risk excluding them from the children's workforce for life. I take that issue very seriously and it may be better if I deal with it next week on the Safeguarding Vulnerable Groups Bill, but I do note the point.
	In conclusion, I shall deal with the early years foundation stage. Leaving aside the issue of precisely which word we use to describe the activities to be undertaken in respect of that, I believe that we would all agree that the importance of the state setting out learning and development goals is worth while if it is conducted sensitively and in close co-operation with best professional practice in that area. We are talking about an early years foundation stage which is very far from being about formal education and formal teaching. The early years foundation stage will continue to promote, as Birth to Three Matters and the foundation stage successfully already do, the kinds of activities and experiences that all good parents already undertake as a matter of course with their children and that they would want and expect to see in any good childcare setting. For example, practitioners who read and speak to babies and young children are helping or—if I can use the word—teaching children early speech and language development. That activity also supports or teaches social development. Those are precisely the kind of activities that we would all wish to see underpinned through the EYFS.
	In another place, my right honourable friend published Early Years Foundation Stage: Direction of Travel Paper, which sets out these issues. I shall circulate it to noble Lords and I believe that your Lordships will be able to see that there is no insidious plot by the education department to nationalise or in any way to force feed children the early stages of the literacy strategy, as might be feared. In that paper, my right honourable friend said:
	"Our aim is that the early years foundation stage should replicate the things which good parents do as a matter of course with their children and which they would therefore expect to see in a good childcare setting".
	That sums up our whole intention in the Bill which is to see that things happen in communities that good parents do as a matter of course with their children and that they would therefore expect to see in any good childcare setting. I have always regarded a fundamental principle for change and reform in this area to be that what a good parent would wish for their children, so the state should wish for children at large. That is a principle that goes back to Tawney, as expressed in those terms. It is a principle that underpins all that we are seeking to do in the Bill.

Lord Rix: My Lords, reference was made to disability by practically every speaker in the House. The Minister made reference to a possible meeting between now and Committee stage with him and his department, but I am slightly surprised that no reference whatever was made to disabled children in his response.

Lord Adonis: My Lords, disappointing the noble Lord could not have been further from my thoughts, because he stopped me in the Lobby two days ago. Unusually, I anticipated his speech by covering it in my opening speech, where I gave a commitment to meet him so that we could discuss the issues. Indeed, as he will see when he reads Hansard, I devoted a considerable portion of my speech to the needs of disabled children. I hope that he does not believe me guilty of any disrespect. I believe that his remarks about the challenges facing the parents of disabled children are shared by all of your Lordships; they are certainly shared by the Government. I had directed my remarks towards them at the beginning; I look forward to meeting the noble Lord and I hope that we can find a satisfactory way forward on the issues that he raised.
	On Question, Bill read a second time, and committed to a Grand Committee.

National Lottery Bill

Lord Davies of Oldham: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved accordingly, and, on Question, Motion agreed to.
	House in Committee accordingly.
	[The DEPUTY CHAIRMAN OF COMMITTEES (Baroness Pitkeathley) in the Chair.]
	Clause 14 [Functions]:

Lord Clement-Jones: moved Amendment No. 21:
	Page 8, line 4, at end insert—
	"( ) The value of loans made under subsection (1) must not exceed the value of grants made under that subsection."

Lord Clement-Jones: From these Benches we welcome the new power to make loans afforded to the Big Lottery Fund in Clause 14. Loans can be an important part of the sustainable funding mix for voluntary and community sector organisations, for example, by allowing organisations to buy a building that they can then hire out to generate revenue. The recent report from the Home Office-backed futurebuilders fund demonstrates that there is an appetite for loan finance among voluntary and community organisations. An organisation of which I am chairman is taking advantage of a futurebuilders fund loan in that way; I declare an interest in that respect. The report shows that more than 70 per cent of the investees—those to whom futurebuilders loans money—had never taken on loan finance before.
	However, one of the key strengths of the National Lottery during the past 11 years has been its role as a large grant-maker. It has provided different types of grants to meet the diverse needs of the voluntary and community sector and made a difference to communities across the United Kingdom. That is increasingly important at a time when most government funding for the sector is through public service contracts and when contributions from the public are declining. The amendment would ensure that the Big Lottery Fund remains primarily a grant-maker, albeit with the power to make loans where appropriate. I beg to move.

Viscount Astor: Will the Big Lottery Fund have different criteria as a basis for awarding loans rather than grants? I hope the Minister will reply that the Big Lottery Fund will see its job as giving grants primarily rather than loans, but it would be helpful if he could say something about the criteria it will use to give loans and under what circumstances.

Lord Davies of Oldham: I am grateful to both noble Lords who have spoken in this short debate. Of course I agree with the noble Lord, Lord Clement-Jones, that the key strength of the lottery is that it is a large grant-maker and that is to be its role. It will be useful for the fund to have the flexibility to provide funding in different and innovative ways responding to individual needs and circumstances. The other statutory lottery distributors, the Heritage Lottery Fund and the Olympic lottery distributor, already have the power to make loans; and the powers of bodies established as companies or under Royal Charter—which includes the other lottery distributors—also normally include a power to make loans. The Bill brings the Big Lottery Fund into line.
	We do not expect loan-making to be a major function of the Big Lottery Fund; that is not its purpose. There is certainly no intention to turn it from a grant-making body into a loan company. That is not the fund's intention either. Its focus is much more on ensuring lottery money is spent, rather than getting it back in again via loans. However, the flexibility to make loans, where appropriate, could be helpful in some circumstances. The noble Viscount, Lord Astor, asked me for examples: loans could be a way to help the social enterprise sector become sustainable by levering in other sources of finance that guarantee sustainability. Small local loans to communities could enable a higher level of finance to be attracted, enabling important regeneration work to be carried out as a result.
	In that sense, the concept of the loan is as a pump-primer and initiator that gets such enterprises into a position where they can attract the larger loans that they need more appropriately from sources other than the lottery. The Big Lottery Fund has given a clear assurance that it will offer loans only where it adds value and supports the sector applying. I emphasise that it certainly will not offer loans instead of grants. Any necessary guidance about the circumstances in which the fund may lend money and the conditions it will be required to observe will be included in its financial directions, as is the case with other NDPBs including the other lottery distributors.
	For the reasons I have given, we are not convinced of the need to provide restrictions on the face of the Bill, which the noble Lord, Lord Clement-Jones, intends with his amendment. I hope that he will see that what is proposed is entirely reasonable and feel able to regard his amendment as a necessary probe that can now safely be withdrawn.

Lord Clement-Jones: I thank the Minister for his response and for clarifying the Government's intentions. As he said, the Big Lottery Fund has given the assurances that he mentioned, which are helpful. It is helpful to have the assurances about the Government's intentions in that respect. I took particular note of his statement that the key strength of the lottery is as a large grant-maker and that will not alter. I agree with him that loans are a useful way of financing organisations in certain circumstances, particularly when it may lever in other finances, and that the other distributors have such power to make loans. It is effectively a question of proportionality. I do not believe that there is much between us in that respect. It may be a big issue at the end of the day as to whether it should be enshrined in the Bill, but for the present I am content with the Minister's assurances.
	I want to apologise to the Minister: because of the timing of the Committee I will not be able to move later amendments that I have tabled. They are in the capable hands of my noble friend Lord Shutt, but I am unable to be here. I am slinking off, but I thank the Minister for his clarification. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Shutt of Greetland: moved Amendment No. 22:
	Page 8, leave out lines 10 to 15.

Lord Shutt of Greetland: It was my understanding that my noble friend was to move the amendment, but we understand that he is required elsewhere. In the circumstances, if I move the amendment, perhaps the Minister will respond and we shall do better next time. I beg to move.

Lord Davies of Oldham: I am grateful to the noble Lord for the clarification of the situation. It gives me licence to roam in reply.
	Amendment No. 22 is concerned with the Secretary of State's order-making power in new Section 36B(3), which is inserted by Clause 14. That power allows her to limit the amounts or proportions of money that the Big Lottery Fund may spend on different types of prescribed expenditure. Amendment No. 22 would remove the Secretary of State's power to specify maximum and minimum amounts.
	To reply to the amendment, it is necessary to explain why this order-making power is necessary. The noble Lord will recall from when we discussed Clause 7 that the new good cause is extremely broad, as we recognised. We need to be able to set out, at the highest level, the types of expenditure on which the Big Lottery Fund should focus. Clause 7 allows us to do that.
	The order-making power in Clause 14, which would in practice be exercised at the same time as that in Clause 7, allows us to limit the amounts or proportions of money that the Big Lottery Fund may distribute on the different types of prescribed expenditure. Without this power the fund could, in theory, spend all its money on one type of prescribed expenditure—for example, transformational grants. We do not, of course, expect it to do that, and it would be unreasonable for it to do so. In practice, the power in this clause will be used in only a small number of cases, where it is particularly important to specify the levels of funding. The Secretary of State plans to use this power to specify the maximum amount of money that the fund should spend on transformational grants and the minimum amount it should spend on the Awards for All scheme. Our intention is clearly set out in the illustrative order that we have made available to the House and which we propose to introduce after Royal Assent.
	The amounts specified were proposed by the Big Lottery Fund, not by the Government. This power is about providing assurance to the public, not dictating to the fund how to spend its money. The fund has asked us to take this power. I can say quite categorically that we do not intend to specify amounts or proportions of money in relation to the three main funding themes. Since any orders made under these powers will be subject to the affirmative resolution procedure, they will be subject to full parliamentary scrutiny. I hope I have reassured the noble Lord about the purposes behind the maximum and minimum levels that we are seeking. This power was suggested by the Big Lottery Fund. It will be used very sparingly indeed and, whenever it is deployed, it will be subject to Parliament's consent under affirmative orders. I hope that that clarifies the issue for the noble Lord.

Viscount Astor: The Minister referred to "transformational grants". Can he translate that phrase from lottery-speak into English and tell me what a transformational grant is?

Lord Davies of Oldham: We are dealing with different areas of Big Lottery Fund expenditure. Where the lottery is giving resources to specific projects, we need the minimum. We are not dictating to the Big Lottery Fund how to spend its money, but we need to make sure that a minimum amount will be spent on the Awards for All scheme. That is where the minimum applies. To guarantee the minimum, it is right that we should seek to put a maximum on the big area of expenditure—the transformational grants expenditure. If not, we cannot offer the guarantee for the Awards for All scheme, which is the more limited aspect of the lottery operation but is, nevertheless, one that we need. I tried to emphasise to the noble Lord that we are seeking the powers against the background that the Big Lottery Fund itself is content with them and wants to ensure the maximum and minimum, so that we have a maximum for the transformational grants that carry on the Millennium Commission's work on funding large capital projects.
	The noble Viscount will recognise that there are areas where these big transformational grants and capital projects have brought undoubted benefit to the community. However, I have no doubt that he is likely to cite an instance, perhaps more than one if he is particularly fertile, where a transformational grant—a major grant—has not been wholly successful and was open to criticism. We need the Secretary of State to be able to impose a maximum limit on such grants, otherwise there could be a danger—I think it an unlikely occurrence which is why I expect these powers to be used infrequently—that the glamour of the big projects takes a much higher proportion of Big Lottery Fund distribution than is wise. We are seeking to safeguard both areas of lottery expenditure.

Viscount Astor: I am grateful to the Minister for his response. I have a slightly better understanding. As there are not very many transformational grants, because there is not a huge number of large projects, it might be useful if before Report the Minister would be kind enough to write to us and let us know what the transformational projects are. That would help us to understand.

Lord Davies of Oldham: I am, of course, ready to write to the noble Viscount and clarify all the issues.

Viscount Eccles: When the Minister writes to my noble friend, will he be good enough to give an indication of the policy towards maximum and minimum? There is always an interesting question about the gap. In theory, one could put out an order in which the maximum equalled the minimum. I do not suppose that is the intention. However, the point is to ask what this regime is intended to achieve. Is it, in effect, different from the regime that has so far been put in place by policy directions instead of orders?

Lord Davies of Oldham: The maximum and minimum are not about the same concept. The maximum will control, if control is ever needed, the proportion spent on transformational grants. The minimum is to guarantee that there is sufficient expenditure on the other areas of the Big Lottery Fund's necessary distribution. It is not maximum and minimum of the same category; they apply to different categories. It is floor in one area and ceiling in the other.

Lord Shutt of Greetland: It is one thing to be given a brief; it is another to be briefless. Nevertheless, I am grateful for the Minister's response. I shall consider it and discuss it with my noble friend Lord Clement-Jones. For the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Astor: moved Amendment No. 23:
	Page 8, line 30, leave out from beginning to end of line 5 on page 9.

Viscount Astor: Amendment No. 23 is concerned with co-funding. I recognise that it removes a large block of the Bill, but its purpose is to initiate a debate on the difference between co-funding and joint funding.
	I should say from the start that we support joint funding—we always have—where the lottery matches funds that have been raised by outside fundraising or by people who have contributed to an organisation or a project or who are receiving money from other sources. That is good. The lottery has been most successful when it has enforced joint funding for possible recipients. It gives credibility to a project, which is a good thing. That is not, however, the same as co-funding. This is where we have a concern. By co-funding, I mean that those with funding—whether it is the Government, which I suspect it largely would be, or anyone else—channel that funding through the Big Lottery Fund. The effect is a loss of transparency and accountability, which concerns us, because, as we all heard at earlier stages of the Bill and as the Minister admitted on Second Reading, a government department once made an announcement about a great project that was financed largely by the lottery and tried to claim it as theirs. We do not want any more erosion of the principle of additionality whereby a government department co-funds a small portion of the funding, the Big Lottery Fund co-funds a large portion, we never know who has done what and everyone tries to claim the project as theirs.
	These are our concerns on which the Minister may be able to reassure us. I recognise that mine is a catch-all amendment and may have implications that I have not thought of, but it is designed to probe what the Government think so that they can be clear about our concerns on the difference between co-funding and joint funding. This is important. We think that what is and is not funded by the lottery should be absolutely clear. We are all for joint funding, which is important. I beg to move.

Lord Shutt of Greetland: I spoke on Second Reading about my concern about the lottery getting involved in spending other people's money. On the other hand, I understand, as I did then, the considerable expertise that the lottery has as grant makers. My concern then was that many people in the country are not happy about gambling or about accepting the proceeds of gambling, and would prefer to seek grants from organisations that did not get their income from the proceeds of gambling. My concern was therefore that if the Big Lottery Fund is involved in dispensing funds that are not lottery funds, it must find a way of saying, "These are not lottery funds. Those of you who do not believe in using funds from gambling can apply for these funds and be absolutely clear that this is not lottery money. It is clean money". This has not popped up in the Bill, and I doubt whether an outfit with a big title like the Big Lottery Fund can actually do what I suggest. Therefore, I am attracted to crossing this out of the Bill, unless someone can find a way of doing it.
	The clause suggests that the Big Lottery Fund should become a laundry for other moneys. There is another point to make here. I have had experience in the past 30 years of being a grant maker, and there are occasions in grant making when you say, "I do not want to be by myself on this. We will fund it if we can get such and such to fund it with us. We might put in 25 per cent". If the laundry then becomes the umbrella that covers several funds, it is uncertain whether that means that there are fewer doors for applicants to knock on. Bearing in mind that this fund has £600 million plus a year to dispense, do we really need to make provision for it to have more money to dispense? I am therefore now inclined to think that the clause is right and that people who want to give money away but who do not have a grant-making capacity and so do not know how to do it have plenty of places to apply to that dispense money well. They have more options than simply going to the Big Lottery Fund. It would be better if this was omitted, and then it would be absolutely clear that the lottery fund is lottery money and that other money is other money.

Viscount Eccles: The noble Lord, Lord Shutt of Greetland, asked whether we could find another way of doing this, and doubted whether the clause would work. I shall journey along these lines in support of my noble friend Lord Astor. In this case, I suppose that we are not talking about match funding, as I think he indicated, because the Big Lottery Fund can give a 100 per cent grant and is not required to find the match funding. Reference was also made to expertise in granting funds. Many other institutions do, of course, have great experience of funding, so in leading up to the Minister's response to this Section 36C discussion, I shall try not to go over any more ground that has already been covered.
	Briefly, the purpose of my amendment is to follow the guidance in the Explanatory Notes that non-lottery funds will be funds from government departments or charitable foundations that wish to make use of the Big Lottery Fund's infrastructure. My amendment seeks to eliminate the statutory bodies and the private sector, which would, I suppose, also eliminate funds from government departments so that we could focus in Committee on grant-making trusts and the voluntary and community sector. I believe that the definition of the voluntary and community sector, on which the Department for Culture, Media and Sport is working with the National Council for Voluntary Organisations, will turn out to be coterminous with the Treasury's third sector. Indeed, the NCVO's summary that,
	"all activity operating in the space between the state and the market",
	may do what needs to be done to stop us agonising over this. Perhaps the Minister will remove any last doubt. His recent letters nearly did the trick. In his letters of 6 and 15 March, he urged us to think about purposes as well as—or was it meant to be instead of—organisations or institutions. The issue here is that purposes and organisations are not alternatives. Purposes provide us with purpose and good cause; organisations—institutions—provide us with cheque signatories and accountability. We need both.
	Many grant-making charities, which I distinguish from delivering charities, are organisations with a distinguished history. Nearly all grant-making charities make grants for health, education and the environment that amount to somewhere between £2 billion and £3 billion a year. What evidence do the Government have that these charities will be attracted to the Big Lottery Fund's distribution infrastructure?
	Will the proposed new Section 36C help because, although it nods in the direction of limiting the fund's freedom of action, it nowhere suggests partnership? The Big Lottery Fund will remain in control and the charities will pay their money into the fund, but in successful partnerships it is not always the same person who leads. Thus, what is proposed is not partnership. What confidence, therefore, can we have that proposed new Section 36C will achieve anything which will take proper account of additionality or of the massive experience gained by charitable trusts over many years?
	Most probably, the Minister will give me a lesson in accountability for public money and I could reply with accountability of trustees under charity law, which will get us nowhere. Yet we have PFI schemes, we have academies and the Government support public/private partnerships in both health and education. I therefore urge the Minister to go back to the department and to the Big Lottery Fund, and to think through and bring forward amendments that would achieve a truly joint endeavour between the Big Lottery Fund and charitable trusts. I believe the lottery-playing public would welcome the introduction of a successful distribution infrastructure and the evaluation methodology of grant-giving charities into the affairs of the Big Lottery Fund. The suggested new Section 36C will not achieve this objective. It needs a fresh approach.

Lord Davies of Oldham: I am grateful to all noble Lords who have spoken in the debate. These amendments are all concerned with the new arrangements for the Big Lottery Fund to work as an agent distributing money for other public bodies, government or private foundations. The suggestion for this came from the fund itself, which believes that such a provision will make things easier for applicants, particularly those in the voluntary and community sector. The noble Viscount, Lord Eccles, invites me into a major debate on its relationship with the voluntary and community sector and we shall spend a fair amount of time today on a number of amendments on this issue. He will know from my letter that I am concerned to establish—I hope it will be on the record of today's debate in Hansard—exactly what we intend in these terms, but that is for a later amendment.
	The fund believes that the provision will make it easier for applicants in that sector who would need to apply only once instead of several times for money for the same project. The fund has been approached in the past to use the systems already in place to get things going quickly. For example, before devolution, the old Scottish Office asked the Community Fund to run its then small grants schemes. The Big Lottery Fund has had a number of requests to handle various types of European funding. The Home Office has also made general inquiries as to whether the fund could handle some grant making on behalf of government—for example, some of the current infrastructure funds for the voluntary and community sector. The Carnegie Trust was interested in passing funding for rural projects to the Community Fund for distribution in an agreed scheme with it. Under the existing legislation, neither the Community Fund nor the New Opportunities Fund has power to distribute other people's money. Therefore, these opportunities to join up the funding stream for the benefit of applicants were missed.
	The amendment of the noble Lord, Lord Shutt, would restrict the value of non-lottery business for the Big Lottery Fund to no more than the value of prescribed expenditure. I do not believe that the new powers need to be prescribed in this way. It would limit the potential to streamline and simplify a range of funding and limit further development, especially in the skills and knowledge which can only be to the benefit of the recipients. Why limit the potential reductions in the cost of distribution and grant management through economies of scale which otherwise would flow?
	We do not expect distributing non-lottery funds to become a major function of the fund—of course not. We all know what the key functions of the fund are and no one wants to see the fund distracted from its main lottery functions. But, in trying to set limits, there is a danger that we may inadvertently prevent the Big Lottery Fund from being able to exploit good opportunities. The fund must have the flexibility to get involved where it thinks it can add value and I hope that noble Lords will recognise the value of the Big Lottery Fund in those terms.
	The same argument applies to the more principled position put forward by the noble Viscount, Lord Eccles. I do not see the question of being involved with others as a major activity of the fund. It is not its job to distribute non-lottery money to statutory bodies, but why ban it? Why ban the fund from distributing non-lottery money to profit-making bodies, which might include social enterprises that fit very much into the framework of the work that the Big Lottery Fund is expected to do? We do not believe that the powers to handle non-lottery funds should be removed, but we recognise that they have to be kept in proportion.
	My response to the initial argument of the noble Viscount, Lord Astor, is that this is not about co-funding or joint funding but about allowing the Big Lottery Fund to handle non-lottery funds. Such funds may be distributed entirely separately from any lottery funds. There is no connection with additionality. It is merely a recognition that the Big Lottery Fund, with its resources and expertise, on occasions, can provide helpful streaming possibilities for other funds. It would not be right to restrict this by legislation so that valuable opportunities are missed to the disadvantage of the recipients of Big Lottery Fund money. On that basis, I hope the noble Viscount will feel able to withdraw his amendment.

Lord Shutt of Greetland: The Minister has not responded to my point about the position of principled people who are against receiving money from the proceeds of gambling. How is the Big Lottery Fund to pin a label on itself—outside its front door, on its website or in its literature—which states, "We have other money which is not the proceeds of the lottery. Ye who are principled in the sense of not wanting to use lottery money should knock here"? How is it going to achieve that? I think it is important that that case is clearly made and that people understand that there is other money behind the same door.

Lord Davies of Oldham: The answer is straightforward: those who seek to obtain resources, grants and support from money which does not flow from the Big Lottery Fund will not go to it. If they want support from an organisation such as the Carnegie Trust, they will go to it. All we are indicating is that where the Carnegie Trust can see that the Big Lottery Fund has got a scheme in place for projects which the Carnegie Trust can enhance and which can hit the same objectives that the trust would otherwise deliver through its own resources, its own organisations and its own structure, it can now fund the scheme jointly with the Big Lottery Fund. In those circumstances, the Carnegie Fund might take the decision to use the resources that the Big Lottery Fund can provide, and it would not make sense to shut off the Big Lottery Fund from that.
	I understand the principle behind the noble Lord's position. Of course it is absolutely right that people should have access to resources from sources other than the Big Lottery Fund—particularly those who look upon the Big Lottery Fund as a beneficiary of gambling, to which they object—and they will go to those other sources. The only time the Big Lottery Fund would enter the picture is where other organisations want to facilitate their distribution through the help it can give.

Viscount Eccles: My amendment sought to remove the statutory sector only to focus my part of the discussion on the voluntary and community sector. In principle, I have no objection to other sources of statutory funding putting their money through the Big Lottery; that seems to me to be a matter for the department and the Big Lottery Fund itself. I was looking for partnership between grant-giving trusts with their own delivery mechanisms and the Big Lottery Fund, in some of which the Big Lottery Fund would accept that it was playing a secondary role. It informs an organisation about what is going on in the outside world if, from time to time, it takes a lead from somebody else and does not always want to lead itself.
	As to the Carnegie Trust, I think I am right in saying that it is very much a research trust, broadly on the lines of the Joseph Rowntree Foundation or one of the other famous research trusts. It does not introduce the issues of delivery and evaluation I had in mind when I looked for a way for the Minister to move towards genuine partnerships between grant-giving trusts—which work in some of the same areas as the Big Lottery Fund—and the Big Lottery Fund, so that they work together. Instead of there being, as I would perceive it, an increasing degree of stand-off between the lottery and the grant-making charities, the two operators within the field would be brought closer together. That is what I was looking for, in order that they could genuinely work together. I do not think this provision achieves that objective, but if the Government do not wish to achieve it my whole argument falls to the ground.

Lord Davies of Oldham: Far from it. We seek to ensure that the Big Lottery Fund can play its part in the distribution of resources. The noble Viscount is right, of course. The Carnegie Trust should not underestimate its range or the work that it does. It has been interested, as I indicated, in passing funding for some rural projects to the Community Fund, because the Community Fund has the structures in place. There was no point in the Carnegie Fund duplicating those structures and spending significant resources on distribution, when the distribution mechanisms were there and able to guarantee that resources flowed through. Partnership is certainly within the framework.
	The danger is that the amendments lead to a restriction on the Big Lottery Fund. The Government are not trying to create big powers for the Big Lottery Fund; the Big Lottery Fund itself has sought these opportunities because it can see ways in which it can be cost-effective and serve the community. The noble Viscount, Lord Eccles, is absolutely right: a great deal of this relates to the community and voluntary sector, which is the subject of a great many of the amendments we will go on to discuss. We are seeking to enable the Big Lottery Fund to play its proper part in that area.

Viscount Astor: The Big Lottery Fund is a new creation, it is not even on the statute book, and it has ambitions to become even bigger. That is the reality of it. My amendment would not, as the Minister says, restrict or shut out other sources of funding for recipients. Quite the reverse: at the moment the distributing bodies jointly fund many projects. I think a large majority of projects in, for example, the National Heritage Memorial Fund, have some form of joint funding. It really would not shut that out. This is different because the Government are asking that money be siphoned through the Big Lottery Fund.
	If charities were giving the money I would not be so concerned, because they have a choice. However, the Minister said that it could be government money, citing the example of the Home Office. I am afraid I have a suspicious nature when it comes to dealing with the Treasury. I have been there; I have seen it at work. As soon as I see the concept of government money going through the Big Lottery Fund, immediately alarm bells begin to ring. It could be funded one year, but cut the next, with the lottery then being asked to take up the slack. That is always our concern. The Treasury is always trying to find ways of using the lottery to cut its expenditure.
	I do not think my amendment blocks any form of funding. There may be a compromise and I would have to consider whether it would be on the face of the Bill. The Minister might also consider this. Could we ask the Big Lottery Fund to ensure that, by statute, it accounts for the different sources of funding going through it in its annual report? Apart from money received from the lottery, any money received from government departments or charities should be clearly separate and accounted for, in order that we have clarity and transparency over where the money comes from. I hope the Minister might consider that issue and come back to my noble friend Lord Eccles and myself about whether the Government could do that to help us out. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 24 and 25 not moved.]

Viscount Astor: moved Amendment No. 26:
	Page 9, leave out lines 6 to 11.

Viscount Astor: Amendment No. 26 is, again, something of a probing amendment, in order to discover just how much power the Big Lottery Fund will have when giving advice about grants and distribution of money to other distributing bodies. The Big Lottery Fund says that this is so that all distributing bodies can co-ordinate on such joint matters as setting up a website. Because the Big Lottery Fund will be the biggest fund, it will naturally take the leading role. This will allow the Big Lottery Fund to provide a one-stop shop for the provision of advice about grant applications. In the other place, during the passage of the Bill, Mr Caborn said:
	"New section 36D will allow the Big Lottery Fund to take the role of lead distributor by allowing it to give advice beyond its own functions".—[Official Report, Commons Standing Committee A, 25/10/05; col. 96.]
	That causes me concern, as the words Mr Caborn sometimes used during the passage of this Bill quite often did. It implies that the Big Lottery Fund has an even greater ambition: to become not only the biggest lottery distributor, but perhaps, over a period of time, the only lottery distributor. That is of concern.
	What advice will the fund give? Will it give advice about process, about how to apply for lottery funds, or will it go further? Will it advise on individual projects? We do not know. There is a concern here that, in creating what the Big Lottery Fund has called a "one-stop shop," it could be a barrier between those who wish to apply and the other distributing bodies. We do not want that to happen. I think it is extremely important that the other distributing bodies maintain their identity because they have built up expertise in their area, whether that is sport or heritage. We certainly do not want to lose that. It would be a doubling of resources if suddenly the Big Lottery Fund had its own experts on, for example, sport. We are concerned about this and it would be helpful if the Minister could clarify the situation. I beg to move.

Lord Shutt of Greetland: I understand that there is a concern here, but not, I would have thought, if the Big Lottery Fund acts properly in distributing money according to the provisions. If someone goes to the wrong lottery, the Big Lottery Fund can tell them which is correct. All it has to do is say, "You have come to the wrong place". Inviting, making or considering applications is the job of the Big Lottery Fund. The third point concerns the use of money paid; I would have thought that was its role. I am surprised by this, but it will be interesting to see what the Minister has to say. Provided the Big Lottery Fund does this properly and stays within its role, I would have thought that the clause was okay.

Viscount Eccles: I spoke on this subject on Second Reading and in the previous Committee sitting, and I have nothing to add to the points I made then. I fully support my noble friend Lord Astor.

Lord Davies of Oldham: It will come as no surprise to the Committee to know that I am grateful to the noble Lord, Lord Shutt, who expressed in three or four graphic sentences what will take me rather longer to express, and I will merely be endorsing his good sense.
	This is about providing advice to people who apply to the lottery for funding. The Big Lottery Fund is the largest distributor and will have the resources to give that advice. It will organise telephone helplines and a lottery funding website. We should not underestimate the difficulties that ordinary people, particularly those running village and community halls, have in knowing how to apply to the lottery and which fund they should approach. This provides the capacity to advise people how best they can help themselves. I cannot see a great deal wrong with that, as the noble Lord, Lord Shutt, so clearly demonstrated.

Viscount Astor: I wish it was as simple as the Minister said. I am afraid I shall have to quote his colleague Mr Caborn again, who always seems to come to my rescue in these debates. He said:
	"The Big Lottery Fund will be able to take a lead in developing common standards such as applications and complaint procedures. It will reduce administrative costs for all lottery distributors and ensure that more money goes to good causes".—[Official Report, Commons Standing Committee A, 25/10/05; col. 96.]
	That may be a good sentiment, but in effect it means it will go beyond just advising applicants where to go. The fund will be involved in the management, process and developing of common standards—Mr Caborn's words—of the other distributing bodies. That is the worry. Will the Minister address that point?

Lord Davies of Oldham: I was tempted to say that I rather regret that the noble Viscount, Lord Astor, is attacking my right honourable friend behind his back when he is marooned in Melbourne and unable to defend himself, given his other onerous duties at the Commonwealth Games. Fortunately, I am able to defend him.
	This is not about the Big Lottery Fund seeking to take over other distributors' business. It merely indicates to the ordinary member of the public seeking to do well and to access funds from the lottery that the Big Lottery Fund will be able to offer real help, expertise and hard information on behalf of the lottery as a whole. It is not a takeover of distribution and has nothing to do with power; it is to do with information to the wider public. The noble Viscount's fears should be allayed by these reassurances.

Viscount Astor: I think the Minister got me wrong. I was not attacking his colleague, Mr Caborn—he was coming to my defence in my amendment. I am always grateful for the support that Mr Caborn has given me in what he said in Committee. Even as far away as Melbourne, he carries on giving me support. He went on to say:
	"We want to encourage innovative advice on the best management of projects, particularly capital projects".—[Official Report, Commons Standing Committee A, 25/10/05 col. 96.]
	That is the Big Lottery Fund giving advice to other distributors. What was said in Standing Committee A about the role of the Big Lottery Fund goes beyond what the Minister has said this evening.
	I am grateful for the Minister's response. It might allay our fears if he considers the issues and writes to my noble friend Lord Eccles and me before Report; I would be grateful if he did so. It is important to know exactly what the relationship will be between the Big Lottery Fund and the other distributing bodies. Will the fund help applicants, which is an entirely good thing? If it is to move beyond that to becoming involved in the processes of the other distributing bodies, such as good practice or advice on capital projects, we need to know how far that will go. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Astor: moved Amendment No. 27:
	Page 9, line 13, leave out "comply with" and insert "take account of"

Viscount Astor: Prescription, which we have debated previously, is a big issue which gives us cause for alarm. The Government have said that the Bill does not give the Secretary of State increased power over distributing bodies. Indeed, they have said that the Big Lottery Fund is no more prescriptive than before because it follows the increased prescription that applies to the New Opportunities Fund. But it is certainly more prescriptive than any of the original distributing bodies. The original distributors, including the Community Fund, have to,
	"comply with directions on matters to be taken account of",
	when distributing lottery funds and "comply with directions" relating to their management, accounting and delegation of powers. If the Secretary of State said they should consider the relative wealth of the community when making grants, they would have to include this as one of their criteria.
	When the New Opportunities Fund was set up, the level of prescription was increased. It had to "comply with directions" from the Secretary of State on all matters, including the distribution of grants, meaning that the Secretary of State had increased powers and could give any direction he wanted.
	The Minister said on a previous amendment that the Government were going to set things out at the highest level when it came to dealing with the Big Lottery Fund, and I accept his reassurances, but what has happened in the past concerns me. I have a copy of the directions that were given to the New Opportunities Fund, and I am sure that the Minister has a copy too. Those directions go way beyond what one might call the highest level. The section covering young people and sport in schools states in paragraph 4.4:
	"The Fund shall commit a total of £750.75 million to projects falling within this initiative. Within this figure up to £50 million should be committed to building or refurbishing outdoor adventure facilities".
	Paragraph 5.2 on opportunities and activities for young people says that the fund shall commit a total of £44 million and describes how that should be allocated. Paragraph 6.3 on the section to reduce the burden of coronary heart disease, stroke and cancer says:
	"The Fund shall commit a total of £213.5 million to projects falling within this initiative".
	We can see that in the past, the directions have been very prescriptive. They have allocated money and have said what it should be spent on. A list in the directions shows exactly how the money allocated to reducing coronary heart disease should be spent. The directions also cover palliative care and childcare. The directions show that the Government have been exact about what they wanted the New Opportunities Fund to do. When one looks closely at a Written Answer by the noble Lord, Lord Warner, to a Question asked by my noble friend Lord Howe, we see that since 2001 the Big Lottery Fund programme has allocated,
	"£125 million to fund 90 additional and replacement laboratories".—[Official Report, 13/3/06; WA 193.]
	Those are catheter cardiac laboratories.
	In earlier debates, we had a long discussion about whether that should be done because it was additional in areas where there might be no funding for these projects. But some of the areas that have been funded are rather wealthy in terms of local government expenditure—they are all over England, including Surrey and Sussex and places such as that. When you look at the lists of those waiting for angiograms for coronary heart disease, which are included in the Written Answer, you can see that the waiting lists bear no relation to where the money was spent. It is interesting that the shortest waiting list is in County Durham and Tees Valley—the Prime Minister's county. I am not sure why that is. The longest is in Surrey and Sussex. What does one learn from that? There is no such thing as the north-south divide when it comes to these things.
	We are concerned about the whole of Clause 14—the directions—because the evidence is there. In the past, the Government have been prescriptive. They are now going to be more prescriptive over a larger sum of money, which gives us concern. It goes back to all the arguments that we had on additionality, which I do not wish to go into this evening because we have had them. However, I want a much clearer understanding from the Government of how they intend to use the power of the directions as set out. The Minister says that they going to be used at the highest level but, frankly, experience has shown that in the past that has not been the case. If the Government have changed their mind, fine, let us hear about that. I look forward to the Minister's response and I beg to move.

Lord Shutt of Greetland: When I spoke on the earlier occasion that we met, I made the point that the literature relating to the Big Lottery Fund indicates that the Government want to build on the successes of the Community Fund and the New Opportunities Fund. But as we go on, it is clear that this is a reverse takeover and that they are really moving forward on the New Opportunities Fund. For example, there are no regional committees and so forth, which I spoke about on the last occasion. The Community Fund took account of that and the New Opportunities Fund complied. If the Minister has such tremendous confidence about the tight central control that the Big Lottery Fund is now being pushed into having, this ought not to be the way forward. It really ought to be able to have confidence in its own decision-making procedures and take account of what Ministers have to say from time to time, otherwise it becomes even more of a nationalised industry, which I fear is the way that it is going.

Viscount Eccles: I hope that it will be convenient for the Committee if I speak about Amendment No. 29 in this group in order to fill out the picture a little before the Minister replies. There are two ways of going about the issue that has arisen.

Lord Davies of Oldham: We are on Amendment No. 27 at the moment.

Viscount Eccles: It might be for the convenience of the Committee if we completed the discussion on directions. Amendments Nos. 28 and 29 are grouped together and I was going to ask the Committee's permission to treat them separately because Amendment No. 28 is so different from Amendment No. 29 that they do not really fit very accurately into a group. In Amendment No. 29 I am seeking to leave out part of the provision about which my noble friend Lord Astor spoke. In Amendment No. 28, I am talking about publicising and it would not for my purposes matter what was in the provision. Whatever is left in the provision, it needs publicising, so it is rather a different point.
	The second way of going about Section 36E is to leave out subsection (2). The principal concern is the progression, which has been outlined by my noble friend, of directions from the small beginnings of 1993 to the present 37 pages of Big Lottery Fund directions with 160 significant headings and the prescriptive detail which follows each heading.
	It is the Minister's expressed intention that the Secretary of State changes to a light-touch regime. He has given us that assurance. There are five pages in the circulated illustrative directions document with three themes and four outcomes. The themes are "community learning", "community safety and cohesion" and "physical and mental well-being", all of which are well represented on the face of the Bill. These and the four outcomes with their abstract nouns rather than the present programmed sums of money and the prescriptive detail which follows seem to show that directions have run their course. Indeed, earlier on this evening we were told about the intention behind orders in respect of maximum and minimum expenditure sums.
	However, surely the board will not need any more directions. Like squirrels, the members will be able to unearth as much as they will need for years to come from the 37 pages. Those 37 pages arrived after the small beginnings of 1993 with Section 26 using "to take account of" and gathered speed in Section 43 of the 1998 Act, which used "must comply" and the question is, what now? We have the same words and an equivalent very widely drawn power. That is against the background that it is Parliament's understanding that directions are for administrative reasons not policy matters—as indeed they are in Section 36E (3), (4) and (5).
	What happened between 1998 and today seems to be that the Department for Culture, Media and Sport constructed a new directions doctrine not used elsewhere in government. Is that what the Government have recognised with their proposed light touch? The question remains about what this history has done to Big's independence and what will happen to its independence in the future. It is clear that the board of Big—a shadowy presence in our debates—does not have a significant degree of independence today. Why is that? We have been told that the board has agreed and agrees to everything—not the usual position of independent boards. How many times has the board disputed draft directions? What has the discussion been about? Did all the members quietly agree to the administrative merger of the three funds? Why indeed has Big's board agreed to so low a percentage as 60 per cent to 70 per cent to go to the voluntary and community sector when it did not have a published definition of that sector? Why not 80 per cent to 90 per cent?
	The Minister asserts that 60 per cent to 70 per cent is as much or more than before, but as I know from Written Questions and Answers, he does not have accurate figures—nor, in the case of Big's grants to registered charities, any figures—to back up his assurances. These questions and their answers, none of them exceptionally contentious, are the stuff of independence. We will most probably be told that all is well and that there is no need for vigorous debate, nor any place for difference of opinion. So much for openness. Behind such an assurance lies the likelihood of a cosy dialogue between DCMS officials and Big's management, who deal with all these matters. Big's board members will remember that they must comply, which means that the Secretary of State will get her way, as she always has. Parliament will not know until long afterwards; meanwhile, debate can be diverted into additionality—a classic red herring.
	Nothing that I have seen or heard leads me to believe that Big's board has, nor has it shown, any degree of independence; nor will the new Section 36E(2) help it to re-emerge. The Secretary of State has gone way beyond the original will of Parliament and has trained Big into compliance. The clause should be left out and directions should revert to administrative matters.

Lord Davies of Oldham: I am very grateful to the noble Viscount, Lord Eccles, who has demolished the first amendment, if nothing else. He indicated that of course there must be some directions, which he defined as the administrative directions in new Section 36E. He will recognise that the noble Viscount, Lord Astor, is against directions in his amendment.
	In the first group, there are financial directions, which incorporate financial controls, which apply to all non-departmental public bodies through their financial memoranda and the lottery distributors are being governed in the same way. The purpose behind such directions, which is common to all non-governmental public bodies, is straightforward. We are under an obligation to protect public money by ensuring that distributors comply with basic financial and operational good practice. The requirements placed on the Big Lottery Fund by new Section 36E(3) are exactly the same as those placed on other distributors in Section 26 of the 1993 Act. Nothing has changed—because, of course, they are compliant with the kind of regulations that we need to safeguard public money with regard to all bodies of this kind.
	What kind of requirements beyond that and what other directions does the Secretary of State have? The noble Viscount, Lord Eccles, will recognise that we are replacing the 37 pages that we had before with the shorter document of the new illustrative policy directions, which he will have read. What do those directions do? They refer, under general directions, to,
	"the need to ensure that money is distributed . . . for projects which promote the public good and which are not intended primarily for private gain . . . that money is distributed . . . to . . . make real and sustainable improvements to the quality of life of local communities".
	They refer to the,
	"need to be innovative and to take risks in distributing money . . . balanced with the need to manage risk in a manner commensurate with type of project and applicant . . . The needs of children and young people . . . The need to further the objectives of sustainable development".
	Who could possibly object to a range of directions at that level? It is exactly the level that we debated at Second Reading when I gave assurances and exactly the level that was debated in the other place in Committee and at the other stages when the Bill was discussed in the other place. We said that we were about light touch general directions and not about prescription. In asking the Big Lottery Fund to comply with these directions, we are asking it to comply with the lightest touch, save in those areas in which there is administrative compliance, which we impose on all bodies.
	The noble Viscount, Lord Eccles, was quoting to me the old directions. I emphasise to him that we have learnt from that and moved on. The old directions were given to the New Opportunities Fund and the Community Fund, but they will be revoked as soon as we have Royal Assent for this Bill. They will be replaced with these new directions, with their light touch which is definitely required in order that we can guarantee the proper use of public money.
	The noble Viscount, Lord Eccles, was good enough to emphasise that he was likely to return to these arguments when he moved to discussing Amendment No. 29. He is probably right in saying that it helps to generalise the debate at this stage to that amendment. All that I can say is that the powers of direction reflect the need to bring together the different regimes of control that existed among the Big Lottery Fund's predecessors. The Community Fund, like other lottery distributors, had a statutory duty to comply, and that is a real legal obligation that we are translating for the Big Lottery Fund. The Community Fund had to take all the policy directions into account and could decide to ignore a matter only in exceptional circumstances.
	We are in great danger of narrowing this debate down to a point that does not do justice to the issues before us in the Bill. What are being sought here are broad directions—specific directions with which this distributor must comply when it comes to its responsibility for public money. That is exactly the same position as with all other non-departmental public bodies. But on the other side there is a clear realisation that the directions that have been given are of a most general kind. The noble Viscount, Lord Astor, may quote my right honourable friend in another place to me in a moment. All I can say is that this is the argument that he put, which we had at Second Reading, when I emphasised that this is about light touch and broad directions. I have a document that demonstrates that fact.
	On the basis of that response, I hope that noble Lords may feel that they have been reassured that what we are about is necessary direction for guarantees of public money, associated with light touch with regard to general directions. I hope that that is accepted by the Committee.

Viscount Astor: I am grateful to the Minister for his response and I am delighted to hear him say that the Government have learnt and moved on. That, indeed, is progress. He gave me some reassurance that they are going to be less prescriptive than they were in the past. But on these directions, has the department finalised them and do they have any draft directions that we can see during the passage of this Bill? When does he think that they will be published? We are in this extraordinary limbo: the Government have created the Big Lottery Fund and now they are chasing up by statute to put it on a statutory footing. When will the directions come before Parliament and how soon after the Bill becomes an Act does the Minister envisage coming back to lay the directions before the House under the affirmative procedure?

Lord Davies of Oldham: As I indicated to the noble Viscount, the old directions lapse when the Bill becomes law, so the Bill will need to be interpreted. We have circulated the draft directions, which are not the final version and ought not to be while the Bill is still under consideration. But I give the noble Viscount the obvious indication that when we issue draft directions, as we have done, that is our best guide to the way in which we intend to act. The noble Viscount can form his arguments against the basis that we have given the maximum amount of information that would be reasonable for the Government to give at this stage, while the Bill proceeds through the House.

Viscount Astor: That is indeed a helpful answer. It means I will not have to move Amendment No. 30. Clearly we will have to study the draft directions between now and the next stage of the Bill and look at them with more care in the light of what the Minister has said in Committee. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Eccles: moved Amendment No. 28:
	Page 9, line 15, at end insert—
	"( ) The Secretary of State must publish directions given under this section."

Viscount Eccles: Before moving Amendment No. 28, I thank the Minister for his reply to the previous discussion. I will not be pursuing Amendment No. 29 this evening. I retain my concern about the description and definition of "independence" when it comes to the boards of non-departmental public bodies, but we will very likely come back to that on another occasion.
	I turn to this amendment. As the Committee will know, there is no established parliamentary procedure for the acceptance, or for the debate, of directions. In this case the Minister circulated the illustrative set we have been talking about, and he has helpfully told us about its status. Normally it is difficult to keep track of directions. Sometimes they are available in timely fashion, sometimes not, hence the need for publicity. The proposal in Section 36E(9) is unsatisfactory. In it, the Big Lottery Fund is bidden to set out directions in its annual report. Its two reports so far were published last December, 21 months after the start of the fund's accounting period. That does not provide a timely opportunity for anyone, Parliament included, to study the content of directions, and the Bill in front of us does no better.
	Nor does the Government's approach give any credence to the probability that from time to time the board of Big has expressed reservations or even dissent. If it did not, where was its independence? These matters are complex and, at the least, as we have heard before in Committee, raise agonising questions of additionality. It is this sort of dialogue that needs to be in reports, not a transcription of directions. The Secretary of State should publish within days of signing directions. I beg to move.

Lord Davies of Oldham: I assure the noble Viscount that the Secretary of State fully intends to make public any directions for the Big Lottery Fund and has indicated that it should also include them in its annual report. The noble Viscount is right that directions are not subject to parliamentary debate, but one shudders to think of the implications for our legislative load if directions encapsulated in legislation became the subject of debate in the two Houses. It would be an unimaginable burden.
	On the question of the directions not being enough in the annual report, I do not think the noble Viscount can expect to see the pros and cons of the Secretary of State's debate with the distributor as a to and fro occurs with regard to certain major issues. We have emphasised that a light touch is required here, so it would be about only the broadest of parameters. The noble Viscount is right; debate goes on, we all recognise that. I am not sure that a kind of Hansard of such discussions included in the annual report is quite what he has in mind. I hear what he says. The directions will certainly be there, and therefore the public will know the broad parameters under which the Big Lottery Fund is operating. That is probably about as far as we could be expected to go.

Viscount Eccles: I thank the Minister for his reply and I hope that an amendment will be introduced by the Government to ensure that there is formal publication by the Secretary of State. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 29 and 30 not moved.]
	Clause 14 agreed to.
	Clause 15 [Dissolution]:
	[Amendments Nos. 31 to 34 not moved.]
	Clause 15 agreed to.
	Clause 16 [Transfer of property, &c.]:
	[Amendments Nos. 35 to 43 not moved.]
	Clause 16 agreed to.
	Clause 17 [Outstanding balances]:
	[Amendments Nos. 44 to 46 not moved.]
	Clause 17 agreed to.
	Clause 18 [Consequential amendments]:
	[Amendments Nos. 47 to 54 not moved.]
	Clause 18 agreed to.
	Clause 19 [Meaning of "charitable expenditure"]:

Lord Shutt of Greetland: moved Amendment No. 55:
	Page 13, line 5, leave out "for a charitable, benevolent or philanthropic purpose" and insert "—
	(a) by charities, or
	(b) by institutions, other than charities, that are established for charitable (whether or not those purposes are charitable within the meaning of any rule of law), benevolent or philanthropic purposes."

Lord Shutt of Greetland: The Bill defines "charitable expenditure" as,
	"expenditure for a charitable, benevolent or philanthropic purpose".
	Abbreviated, that is: "charitable . . . purpose". That will be clarified when the new Charities Act arrives. The definition may not change a lot, but the Act will set out in greater detail what a charitable purpose is, and people will know where they stand. This amendment would delete,
	"charitable, benevolent or philanthropic purpose",
	but let charitable expenditure be the expenditure incurred by charities—that is clear; we know what a charity is—and institutions other than charities that have established the charitable, benevolent or philanthropic purposes.
	I see the point in my noble friends putting their names to this amendment, because it brings us back to our old friend additionality. The reason for pursuing this amendment is to be absolutely clear that there is a distinction between what is charitable, and done by others, and what is government expenditure, which, for reasons we all understand, can now come under this Bill. The amendment gives the Minister a chance to spell out the additionality issue once more and to be clear about this 30 to 40 per cent and 60 to 70 per cent.
	I would not mind pursuing that last point a bit further. There is a big difference between 30 and 40—you add a third. The distinction between 60 and 70 is rather less. People will want to know that it will not just be 39.9 per cent and 60.1 per cent year after year. There needs to be clarity here. This is an opportunity for the Minister to allay some of the concerns that people have, some of whom have contacted us. We share those concerns. I beg to move.

Viscount Astor: My amendment is grouped with this one. We support the change that the Government have made to the National Lottery etc. Act in Clause 19. The definition is clearer and better. We understand that those involved with charities are happy with it.
	When I tabled my amendment about political causes, I did not know that funding of political parties would suddenly become such an issue. I hope that the Minister will give me the very simple answer that my amendment is unnecessary because political parties are excluded.

Viscount Eccles: I shall amplify what has already been said; I hope not to cover the same ground. Clause 19 is all right, provided that we remember one or two things, the first of which is that it was probably unnecessary. I suspect that the lawyers danced on the head of a pin and kept telling the management and boards of the two lottery funds that there were problems with the drafting of the original Bill. However, when I have asked what the problems were and requested one or two examples, none has been provided. Lawyers are extremely good at telling you what you cannot do. My own approach in years past has been to say to them, "Well, I dare say the Bill doesn't allow me to do that, but who will object and what will their objection be?". You cannot think what objection there would be because what you propose to do is undoubtedly a good thing. That was in the days of the Commonwealth Development Corporation, which, in the early 1990s, still existed by virtue of a Bill drafted in 1948. Life was different then; for example, they said, "We are not sure that you can do mobile telephones". Well, we did it and nobody objected. I have a feeling that something here has been built up into much more than it really is. We should remember that.
	Secondly, as I mentioned, you cannot live on purposes alone; you need institutions as well. "Purposes" is abstract; institutions are accountable. I am sure that the Big Lottery Fund will look very carefully at the institutional arrangements of the body to which it will make grants and then monitor and evaluate the results of that grant, not in terms of a purpose, but of the performance of the grant recipient. Clause 19 does not make a lot of difference and, therefore, one should not go on about it for too long, but it leaves us with things that we need to remember.

Lord Davies of Oldham: Both amendments are concerned with the definition of "charitable expenditure", in relation to the new Big Lottery Fund good cause, set out in Clause 19. Clause 19 defines "charitable expenditure" as,
	"expenditure for a charitable, benevolent or philanthropic purpose".
	This is to be a purpose-based approach. I am grateful to the noble Viscount, Lord Astor, who indicated that he supported the new definition. I am marginally distressed that we are not joined in this matter by the thinkers in the Liberal Democrat Party. I shall seek to emphasise to them why they should join us in supporting this new definition.
	The existing definition of "charitable expenditure" in relation to the Community Fund good cause adopts an institution-based approach. That is exactly what the noble Lord, Lord Shutt, would want us to return to.
	The new definition has many merits. It is intended to ensure that the focus in future is on projects and outcomes, rather than on institutions and constitutions. The definition is being changed in the light of the practical experience of the Community Fund and with the full support of the Big Lottery Fund Board.
	In the past, the Community Fund has been unable to fund some deserving projects simply because the organisation applying for funding has had the wrong kind of constitution. This is not a theoretical problem; it has a real impact on real organisations. Many organisations with good projects to benefit communities have had to be turned down for funding under the current definition. These include numerous small community groups such as credit unions, tenants' and residents' associations, co-operative enterprises, some sports clubs and ex-servicemen's organisations. They also include some large organisations such as the Social Enterprise Coalition and the Soroptimists.
	If the Liberal Democrat Party, in proposing this amendment, is saying that it has none of these institutions' welfare at heart, there will be rejoicing in other parts of the House. The noble Lord should perhaps rethink his amendment on those grounds. The new definition will give the Big Lottery Fund much-needed flexibility to support good projects, even where the applicant is not set up for a charitable, benevolent or philanthropic purpose. As long as the projects are for those purposes, they will in principle be able to be funded. The Big Lottery Fund will no longer have to make complex eligibility judgments as it does now. This will add to the efficiency with which applications are processed and help to reduce costs, adding to the £6 million to £12 million of savings that we expect to be achieved each year as a result of setting up the Big Lottery Fund.
	I know that there was some initial uncertainty, particularly among those in the voluntary and community sector, about why Clause 19 needed to be drafted precisely as it has been. We believe that we have allayed those concerns. The National Council for Voluntary Organisations met the Big Lottery Fund, the fund's lawyers and the Social Enterprise Coalition last month to discuss the reasons behind the change.
	We understand that, following that meeting, the NCVO is satisfied that the new definition is practical. It accepts that Clause 19 contains the best form of words to ensure that the Big Lottery Fund can fund the entire third sector, and that a definition of the sector in the Bill would be too restrictive and potentially damaging for it. Decisions on funding will of course be for the Big Lottery Fund.
	We have heard a great deal about how the fund should make such decisions independently, without interference from government. I am happy to give the assurance on the record that we have absolutely no intention of interfering and that Clause 19 cannot be used to divert funds to central government; nor—and the noble Viscount, Lord Astor, asked for this reassurance—is it our intention that it should be used to divert funds to political parties. It is highly unlikely in any case that party-political activity would constitute a charitable, benevolent or philanthropic purpose. Neither the Community Fund nor the New Opportunities Fund has ever funded a political party; why should anyone start doing so now? Funding decisions will be for the Big Lottery Fund, and I emphasise that the Government are outside that framework. I am concerned that we recognise that fact.
	In the circumstances, there is no need, in our view, for an amendment to spell out matters any further. I draw the Committee's attention to the policy direction that we have given to all lottery distributors requiring them to take into account the need to ensure that money is distributed for projects that promote the public good and that are not intended primarily for private gain. I can also give the assurance that the clause will not lead to the voluntary and community sector organisations losing out. As the Committee discussed last week, the Big Lottery Fund has given an undertaking that 60 per cent to 70 per cent of its funding will go directly to voluntary and community sector organisations. That undertaking will operate on an institutional basis. The fund has worked closely with key VCS stakeholders to develop the definition of a voluntary and community sector organisation for the purposes of the undertaking, and I understand that broad agreement has been reached.
	A key principle is that it is where the money ends up that is important, so money awarded to a local authority and then distributed to voluntary and community groups will count. However, money awarded to voluntary and community groups and then distributed to a local authority clearly would not. That must be the sensible approach. The fund will continue to work with voluntary and community sector organisations as they develop detailed guidance on this issue.
	While we are on the subject of the Big Lottery Fund's undertaking, I should like to clarify the Government's position, as I did in a letter last week to the noble Lord, Lord Clement-Jones, and others who spoke at the Committee's first sitting. The fund has done everything possible to show that it intends to deliver on its undertaking and to do so in a clear and accountable fashion. We have every confidence that it will do so. I recognise very well the desire for reassurance on that matter, so I am this evening prepared to place on the record that the Government will act as the guarantor of the Big Lottery Fund's undertaking that 60 per cent to 70 per cent of its funding will go to the voluntary and community sector. We will do everything possible to ensure that the fund delivers on the undertaking and reports on it in a transparent and accessible way.
	I return to the amendments—I have not lost sight of that which has promoted this debate. I stress that the important thing is what the lottery money is spent on, not who spends it. Clause 19 will ensure that deserving organisations which have been largely ineligible for funding can now be considered. In the light of that reply, I hope that the noble Lord will feel able to withdraw the amendment.

Lord Shutt of Greetland: I am delighted to have the Minister's vibrant response and, as he indicated, assurance after assurance put on the record. I spoke earlier about the business of having a brief. In my view, the brief was to flush out the business of what I shall call the charitable sector as a whole and alternative government funding. The Minister is absolutely right about the meaning of charitable expenditure. I take the view that, with the assurances, Clause 19 as it stands is bang-on right. What he has said, and what is important, is that any applicant to the Big Lottery Fund can go along and say, "I haven't had time. I haven't got my registration. I don't feel I need a registration. But what I want to do and what I want the money for is so clearly a charitable purpose". That is what is important and I am delighted that the Minister has said it. I am delighted that the lottery fund will not say, as some charities do, "You are not a registered charity, therefore we cannot entertain you". Of course they can entertain them but they choose not to. I am delighted that it is clear and on the record that someone with expenditure for a charitable purpose can be within the purview of the Big Lottery Fund. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 56 not moved.]
	Clause 19 agreed to.

Viscount Astor: moved Amendment No. 57:
	After Clause 19, insert the following new clause—
	"DIRECTIONS ON LARGE PROJECTS
	In section 26 of the National Lottery etc. Act 1993 (c. 39) (directions to distributing bodies) after subsection (4A) insert—
	"(4B) The Secretary of State shall give directions to distributing bodies that no project may be awarded a grant or loan by the Lottery Distribution Fund that exceeds 25 per cent of the distributing body's annual budget.""

Viscount Astor: This further probing amendment seeks the Government's view on large grants, because when one looks at the history of what might be called the mega amounts of money going to individual projects, it is not a terribly happy picture. Some of the others have not been successful and, in some instances, over 25 per cent of the budget of a distributor in any one year has gone to a single project. We think that dangerous and hope that the Government will not encourage that in future. Perhaps the Minister might say something on the Government's view on that, and whether it will be part of either guidance or directions to the distributing bodies. I beg to move.

Lord Davies of Oldham: This amendment would have several undesirable effects. I hope that the noble Viscount will withdraw it after I have explained our intention. It is unnecessary, as the Secretary of State already has powers to issue both policy and financial directions to distributing bodies. Indeed, it would significantly add to bureaucracy both for the Government and for distributors—and would be unnecessary bureaucracy at that.
	The nature of the direction-giving function proposed would represent unjustified micromanagement of distributors. Existing policy and financial directions are framed in much more general terms, which I sought to defend in our discussions earlier this evening. It is unnecessary to write such a precise requirement into directions, and inappropriate to write it into the Bill. Distributors already have policy directions which require them to take various matters into account when deciding to whom to distribute lottery proceeds, and for what purpose. It is an important principle that, within those parameters, distributors should decide independently which applications for lottery grant to accept or reject, and a distributor should be free to support a large-scale project if it believes there will be public benefit from it.
	The noble Viscount may have one or more public projects that he would deem less than successful for the public, but, within that framework, if his amendment were carried, developments such as the Eden Project, the Tate Modern or the Millennium Stadium might not have taken place because distributors would have been prevented or discouraged from taking such calculated risks. There is always the risk that a big project might go wrong, but the lottery's record is good. For example, of the 223 grants made to capital projects by the Millennium Commission, only three have gone into liquidation—a pretty good record.
	The Government would be the first to agree that the lottery is not just about large projects. I understand that the noble Viscount is concerned that there should be due recognition of small being beautiful. From the late 1990s we have encouraged greater emphasis on smaller, community-based projects. That has been reflected in changes to the policy direction issued to distributing bodies. However, this amendment would fetter distributors' discretion—there is no track record to show that it is necessary—and introduce an increased bureaucratic level of interference. It is not justified in being on the record, and I hope that the noble Viscount will feel reassured by that response.

Viscount Astor: The Minister wants to proscribe only when he wants to proscribe. He does not want anybody else to proscribe; that is the fact of it. The danger is that, in giving out 50 per cent of the proceeds, the Big Lottery Fund could give a huge grant. Therefore, anything over 25 per cent would be such a vast amount. Quite frankly, I totally discount the Minister's response about more work, and so on. He should have crossed that out rather quickly and not bothered with it, since it rather demeaned his argument. There will not be, at the end of the day, many of these, and I cannot see the Government encouraging another dome—at least, not if they have any sense.
	There was a glimmer of hope when the Minister said that the Government would encourage smaller projects. If the Big Lottery Fund was tempted to give up to 25 per cent of its vast amount of money to one project, as has happened in the past, there would be a public outcry. I hope that the Government and the Big Lottery Fund both now recognise that; as they probably do, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Viscount Astor: moved Amendment No. 58:
	After Clause 19, insert the following new clause—
	"REPORT OF INTERNATIONAL EXPENDITURE
	In section 34 of the National Lottery etc. Act 1993 (c. 39) (annual reports by distributing bodies other than Millennium Commission) after subsection (2) insert—
	"(2A) The report shall set out any awards made during that year for projects outside the United Kingdom.""

Viscount Astor: The amendment concerns expenditure by distributing bodies outside this country. We have always believed that the lottery should be primarily for this country, for British citizens, and projects that affect British citizens wherever they may be. That has largely been the case, but when I looked at what has happened, it proved difficult to work out, because the Community Fund gave large sums of money to international projects. One can look at the fund's website and discover that some of those donations were made under its international grants programme; but one cannot find many of those because they are defined as being made either under a local authority category or under a different assessment office that has assessed many projects both in this country and abroad—thereby not coming under the international grants programme.
	When I asked the Community Fund and the Big Lottery Fund for exactly what grants they had made, I received conflicting answers. I was concerned at that, because it should be clear and while we support the need for an international programme of grants from the lottery, we would like to know how much has been given.
	The reason for my amendment moves on from that. Considering the powers that the Secretary of State is given in the Bill, Clause 7, for example, regarding National Lottery Distribution Fund apportionment, says nothing about international grants. It mentions Wales, Northern Ireland, health, education and so on, but international grants are not mentioned. I do not know whether the Government will include in directions a sum that should be allocated to international projects. Will the lottery funds consider that they could do that anyway, without directions? Will they receive any guidance on that?
	I understand that the Big Lottery Fund will announce shortly that it will have an international grants programme of up to £60 million, plus £12 million for long-term reconstruction initiatives in areas affected by the tsunami, which we support. But it is not clear whether such sums will be an annual expenditure, or whether that figure will change. What is the Government's view? They have created the Big Lottery Fund, which will receive 50 per cent of lottery funding and will look to the Government for guidance. That will include whatever the Minister says in this House. So it would be useful if the Government would say how they envisage the international grants programme working alongside domestic programmes. What emphasis should the Big Lottery Fund place on that and will there be directions? Will the other distributing bodies that, I admit, I have not focused on, have power to make international grants? Originally, it was the Community Fund that made international grants, but that has been subsumed into the Big Lottery Fund.
	The intention of the amendment is to obtain some clarity. I understand the Government's thinking, and the Minister should reassure us that when the Big Lottery Fund reports, it must state which geographical areas and what type of projects have received international grants. I beg to move.

Lord Joffe: I declare an interest as the trustee of a number of UK charities operating outside the UK and as a former chair of Oxfam. I support what the noble Viscount, Lord Astor, said about the importance of additionality, and of transparency and accountability. However, I am afraid that I do not understand the reasoning behind this amendment. If the amendment had provided that the report should set out all awards made during the year for all projects, whether in the UK or outside, I might have supported it. But why limit it to "projects outside the United Kingdom"? It is difficult not to draw an inference from this selective amendment, that projects outside the UK are prima facie suspect simply because they are overseas. Is the noble Viscount of the view that overseas development charities are less well managed than charities operating in the UK; and if so, on what evidence does he rely for this view? Over the past 25 years or so, I have had a considerable involvement with quite a range of charities, some operating in this country and others overseas, and have seen nothing to suggest that projects in the UK are better managed or better selected than those outside.
	The lottery's international programme has built up an excellent reputation over the past 10 years for being an effective funding distributor. Examples are the grants to the charity Impact for a floating hospital in Bangladesh which has already helped to treat more than 115,000 patients. The same charity received funding for a large disability prevention programme, which has already cut maternal and child mortality by more than 28 per cent and 48 per cent respectively in the areas where it has been piloted. Grants to Oxfam have helped improve education for 10,000 children in Zambia and in the arid north-east of Brazil will, among other benefits, provide 4,500 water tanks.
	From previous correspondence with BOND, the consortium representing 285 development charities in this country, it appeared that the noble Viscount was concerned about some of the grants that had been made overseas and of which apparently the Daily Mail and a number of other sections of the media had been very critical. Perhaps he has dropped those particular concerns at this stage. As the noble Viscount now nods that he has not, let me touch on them. Some of the grants made have excited the interest of xenophobic subsections of the British press. This is an indictment of the press concerned, rather than the lottery fund or the overseas charities. An example of this unfortunate tendency is the criticism of a grant of £295,000, which was a well-designed development project aimed at promoting secure livelihoods in Peru. A small part of the project, amounting to less than £2,000, concerned the breeding of guinea pigs, which are a staple food in the region and was the basis of much unfounded alarm by the Daily Mail about the entire project. It would be sad if the lottery fund were to be intimidated in its grant-giving by the fear that parts of the media might launch misguided campaigns criticising its carefully considered decisions.
	The noble Viscount asked questions about the programme and the moneys allocated by the Big Lottery Fund in relation to international grants. Its position is made perfectly clear in the briefing that it has produced for this Committee, where it is set out clearly why it wished to support international projects. It undertook public consultation in June 2004, showing a sizeable majority of at least 75 per cent of the public in favour of supporting international programmes. This support and the concern of the public for the developing world is also shown by the Charities Aid Foundation's latest statistics that overseas causes are in the top three of causes supported by voluntary donations over the past two years, amounting in all to about 13 per cent of individual giving.
	Taking the lower figure of 13 per cent and relating it to the £600 million to be spent annually by the Big Lottery Fund on the voluntary and community sectors, it would seem that the allocation to international grants should be in the order of £78 million each year, rather than the £24 million a year over three years as is presently planned. In practice, therefore, the fund will be spending a little less than one-third of the amount that the public could reasonably expect to be spent on projects outside the UK.
	I think that the noble Viscount asked the Minister about the proposed expenditure on the international programme. Certainly it is clear from the press release put out by the Big Lottery Fund's board that over the next three years it is intending to spend £60,000 on development and similar projects overseas and £12 million on tsunami-type projects. Will the Government use the powers that they have to instruct the fund's board to increase its allocation to overseas development charities to an amount proportionate to the support that the public gives to such causes? I suggest that that would be fair and equitable.
	Finally, I was pleased to note that the noble Viscount said that his party supported overseas projects. If the problem is that he cannot find out exactly what overseas projects are supported by the Big Lottery Fund from the information given, it seems to me that all that is required is for the fund to be more careful in producing its reports. Certainly there can be no basis whatever for requiring a report to be produced for every single overseas project, when there is no such requirement for projects which take place in the United Kingdom.

Lord Shutt of Greetland: We are all grateful to hear the words of the noble Lord, Lord Joffe, who has tremendous experience in this area. As we conclude this Committee stage, we are reminded that charity may well begin at home but it does not end there.
	Frankly, I cannot weigh up this amendment. On the one hand, I say to myself that it will do no harm as it is transparent and so on, but, on the other, I ask myself whether it is there to put the board off having an international programme, with the board saying, "Oh, we had better not do these international things. They will have to go in a special place in the annual report and that might upset people", and so on. In terms of accountability in producing an annual report and accounts, I should have thought that, in any event, if the international programme was of a material size, that would require something to be said about it.

Viscount Astor: I tabled this amendment because the information was not in the record of the Community Fund. That is my point. It has nothing to do with whether one is for or against the grant programme; it is simply that one cannot find the information. The noble Lord should not read a whole load of things into the amendment which are not there and which I did not mention when I moved it.

Lord Shutt of Greetland: The noble Viscount mentioned that he wanted something to be put in that was not there. I am saying that I cannot weigh it up. If I was preparing the report and there was a substantial international programme, frankly I would brag about it. I suspect that having an international programme would be popular with the ticket-buyers. Of course, some ticket-buyers would not like it but many would.
	I do not know how prescriptive the Minister would want to be on an annual report but, if the international programme is significant, and a body is spending the kind of money that is to be spent here, I would expect there to be a significant paragraph and indeed financial information to set that out. However, it proves that lottery expenditure is a little like beauty: the benefit of it lies in the mind of the beholder. As we are concluding this stage, I thank the noble Viscount, his noble friends and the Minister for the work that has been done so far. We shall return on another occasion to think on these matters.

Lord Davies of Oldham: If the amendment were prompted by the failure of any public body to give the noble Viscount accurate information, I forthwith apologise. I assure him that I shall make good that deficiency. I have a list of figures that goes back over the past decade of the amount spent each year, but for me to read anything into the record might appear a little otiose at this stage. I shall write to the noble Viscount, as I can to other Members of the Committee, and share the distribution of these grants over the past decade.
	The lottery was set up primarily to benefit projects within the UK, but when the Community Fund was set up following the National Lottery etc Act in 1993, the then Conservative government decided that the fund should also be able to support UK charities working overseas. They are responsible for the use of this money. All credit to the Government on that occasion for the action that they took and all credit to the charities for the way in which they exploited those opportunities. The noble Lord, Lord Joffe, testified to the excellent effect that they have had on projects abroad. Of course, there have been one or two mishaps; there always are with projects abroad that involve communities that are less developed than our own.
	I can reinforce the point made so ably by the noble Lord, Lord Joffe—I cannot match his eloquence, but I can supplement his figures. In the famous Cusichaca project, where the popular press suggested that a grant of £295,000 had gone to waste among the poorest in Peru, in fact, of the £295,000, £2,000 was spent on the guinea pigs project which failed; the rest went to a community in very great need. That did not detract from that point made by the noble Lord, Lord Joffe, about the distortions that occur in some of the popular press.
	The present funding programme operates at about £20 million a year. I can tell the noble Viscount, Lord Astor, that it is intended that £60 million should be spent over three years and that is the broad basis of the sums. I could go into considerable depth on the figures, but I do not think I need to. The contributors to the debate have reassured the Committee—and through the Committee, the country—that these initiatives are enormously beneficial. Of course, they are backed by a generous-spirited British public. If anyone for one moment suggests that the British public are not generous-spirited with regard to projects abroad, I refer them to the response of the British people to the tsunami disaster not so long ago. That was testimony to the fact that people have a concern for such issues. Such projects are planned in very different terms from responses to disasters, although help was given on that occasion too.
	The noble Viscount, Lord Astor, sought to table a probing amendment. It solicited a magnificent response from all parts of the Committee to which I can add little, but I will add the figures and circulate them to all Members of the Committee.

Viscount Astor: Will the directions issued by the Secretary of State specify what the Big Lottery Fund should allocate or give to international projects?

Lord Davies of Oldham: No, this is a Big Lottery decision. The Government take pride in their development strategy, which is on a vastly more significant scale than the projects that we are identifying here. Sixty million pounds is a modest amount compared with government investment, but carefully directed to specific projects, reflective of the commitment of the British people to help in particular areas of need, it is valuable. In addition, on the basis of accuracy I should indicate to the noble Viscount, Lord Astor, that the £60 million is also supplemented by £12 million, which will be available specifically for projects to help communities affected by the tsunami. I indicated that I was not going to engage in statistics at this late hour this evening. The noble Viscount is entitled to completely accurate figures and I will ensure that he receives them.

Viscount Astor: I am grateful for the Minister's response. In response to the noble Lord, Lord Joffe, I say that I am always concerned that money from the lottery is well spent. As the Minister said, some projects have been more successful than others. When the noble Lord, Lord Joffe, made his speech, I thought that he had clearly written it before he came here and had not listened to a word I said when I moved my amendment. I am not against any international grants; I was merely asking the Government for clarity. I am sorry that the noble Lord did not listen with more care when I moved my amendment, but never mind. We have had a useful debate and gained some information from the Minister, which has been helpful. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 20 agreed to.
	Remaining clauses and schedule agreed to.
	House resumed: Bill reported without amendment.
	House adjourned at six minutes before nine o'clock.
	Tuesday, 21 March 2006.